Preamble

The House met at half-past Two o'clock

PRAYERS

[MADAM SPEAKER in the Chair]

PRIVATE BUSINESS

TAMAR BRIDGE BILL

Considered; to be read the Third time.

Oral Answers to Questions — TREASURY

The Chancellor of the Exchequer was asked—

Windfall Tax

Mr. Coaker: What representations he has received on his policy to spend the proceeds of the windfall tax on a welfare-to-work programme. [21051]

Mr. Plaskitt: What representations he has received from employees' representatives on his policy to spend the proceeds of the windfall tax on a welfare-to-work programme. [21065]

The Paymaster General (Mr. Geoffrey Robinson): I am pleased to tell the House that we have had widespread positive acceptance of our welfare-to-work programme from employers, from employees and their representatives and throughout the voluntary sector. In particular, I am most encouraged by the firm support of British industry. I am pleased to say that many Members of the House are acting as positive ambassadors for the programme, and that is having a very good effect locally.

Mr. Coaker: I thank the Minister for that reply. Can he confirm that the many positive replies that we have had on the welfare-to-work programme include those from employers in my constituency in the Greater Nottingham area, such as Boots, Experian and East Midlands Electricity? Can he also confirm that not only big employers but many ordinary people are pleased to have a Government determined to tackle unemployment and the scourges of social exclusion and poverty that it brings with it?

Mr. Robinson: I agree with my hon. Friend on all those specific points. The three companies that he mentioned—East Midlands Electricity, Experian and Boots—are all active in his area, which, as he is aware, with 4,000 new dealers passing through the programme in the first year, is the biggest in the east midlands. We are very encouraged by the work that is being done there

and by the initial response to the pathfinder programme, which is not operating in his area but which, I am pleased to tell the House, is off to a flying start.

Mr. Plaskitt: I also welcome the introduction of the welfare-to-work scheme in the pilot areas. However, looking forward to the time when the scheme goes nationwide, can my hon. Friend confirm that many substantial employers in my constituency, Warwick and Leamington, have expressed a commitment to participate in the scheme, and that their involvement will be vital to bring opportunities for work and training to the many young unemployed people in my constituency?

Mr. Robinson: Again, I can agree with all that. My hon. Friend will be aware that, in particular, Ford and Christian Salvesen are very active in the programme in his local area and I am sure that when it gets under way in April 1998, when we roll out the programme nationwide, he will rapidly become aware of considerable benefits accruing from that to those who have previously been denied the opportunity to work. One of the most positive aspects of the pathfinders is that the new dealers are responding extremely well, and especially those given a personal adviser.

Mr. Forth: Given that unemployment has now been falling for about five years and is at an all-time low, at least in living memory, and given that the numbers of both the long-term unemployed and the young unemployed have been falling dramatically and continue to fall, why does not the hon. Gentleman review this ridiculous gesture programme, which is costing so much money, and give the money back to, for example, the pensioners who have been mugged by his Department?

Mr. Robinson: I think the whole House and the country—and perhaps, on reflection, the right hon. Gentleman—will be dismayed at the terms in which he tried to dismiss this very important initiative. It is true that young unemployed 18 to 24-year-olds are fewer than they were. It is also true, however, that many are still coming on to the programme, and will be coming on to the programme, who have been out of work for six months or more, and we, as a Government—unlike the Conservatives when in government—intend to do something about it.

Dr. Cable: Does the Minister accept that in some parts of the country there is a growing labour shortage, especially of young people, and that there is some impatience that the resources of the welfare-to-work programme cannot be redeployed more quickly for older workers who have been out of work for a long time?

Mr. Robinson: As the hon. Gentleman knows, within the welfare-to-work programme £350 million has been put to one side for those who have been out of work long term, and that will have good effect. We also have a separate skills shortage programme to put that problem right.

Mr. Blizzard: May I say how welcome the new deal scheme is in my constituency of Waveney? In answer to the right hon. Member for Bromley and Chislehurst (Mr. Forth), the virtue of the scheme is that, by its very


nature, it involves precise targeting. In my constituency, there are pockets of unemployment within a relatively prosperous area and the scheme will attack those pockets. The unemployed in those areas will benefit most from the scheme because it directs resources where they are needed most. My constituents are looking forward to the scheme getting under way in April and preparations for it are well advanced. Does my hon. Friend agree that this policy proves the Government's commitment to social justice and economic efficiency?

Mr. Robinson: Indeed. It is a £3½ billion project that will last for four years—unlike some of the tinpot schemes that were dreamt up by the Conservatives when they were in government. My hon. Friend will also be pleased to know that the gateway programme targets specifically particular pockets of unemployment in otherwise relatively prosperous areas. That is one of the scheme's innovations that will make it a success.

Mr. Heathcoat-Amory: How can the Paymaster General plausibly promote a welfare-to-work programme that involves cutting welfare to the poorest people and raising taxes for ordinary savers while, at the same time, he is dodging taxes through the use of an offshore trust that he now admits that he controls? If the Paymaster General wants to retain a shred of credibility for himself and the programme, he should belatedly make a full disclosure about how his welfare is being looked after and how his windfall is being protected by the use of an offshore tax-avoiding trust, which the Labour party said before the election that it was committed to removing.

Mr. Robinson: The right hon. Gentleman seeks to hide the fact that the Tory party opposed the money and voted against the programme. I am pleased to say that many Opposition Members are now taking a positive interest in the programme and are playing a positive role. However, the right hon. Gentleman seeks to hide the fact that he voted against the measure. While the Opposition will the end, they refuse to vote the means.

Mr. Alan W. Williams: Does the Minister agree that the welfare-to-work programme not only tackles poverty but, by expanding the available work force, increases the capacity of the economy and will play a very important role in tackling inflation in a much more positive and beneficial way than by raising interest rates, for example?

Mr. Robinson: My hon. Friend is absolutely correct. The welfare-to-work programme will play a particularly important role in Wales. As to the question of skills shortages and the tightening of the labour market generally, all sectors of British industry firmly support the programme because they have begun to see that it could be the smart way of easing existing skills shortages.

High-technology Industries

Mr. Garnier: What is his policy on providing financial support to high-technology industries. [21052]

The Chancellor of the Exchequer (Mr. Gordon Brown): The essential policies for high-technology firms are those that promote stability and prevent stop-go. In addition, in order to encourage investment, we have

reduced the corporation tax rate for businesses from 33p to 31p. We propose to reduce corporation tax to 30p in 1999. We have produced a small and medium business tax relief by doubling capital allowances and we are reviewing capital gains tax. Dr. Keith McCullagh and senior figures from high-tech companies are also producing a report about how to stimulate high-tech investment, especially in research and development-based firms.

Mr. Garnier: Do the Chancellor and his Treasury team plan to assist high-tech industries by exempting them from capital gains tax on share issues? Is that not precisely what the Paymaster General managed to do by transferring £10 million-worth of shares to do with his high-tech company into his offshore trust? Why should the Treasury team, which contains a Minister who seems intent on avoiding tax, be so keen to impress upon other lesser mortals that they should pay every penny of tax?

Mr. Brown: I might have known that the hon. and learned Gentleman was not at all interested in high-technology firms. The Conservative party should start talking to businesses that have welcomed the cut in corporation tax from 33p to 31p—the lowest rate of corporation tax in our history. They have also welcomed the fact that we plan to cut corporation tax to 30p and that we are reviewing capital gains tax. It is a measure of the Government's success that we have persuaded senior figures from the high-technology industries to come together in a working party that will report soon, with a view to the Budget, on how we can help specifically some of the most modern, high-technology firms in our country.

Mr. Sheerman: Does my right hon. Friend agree that many high-tech companies spin out of universities and university research? Is there a way in which he could introduce a tax break for companies and individuals who give back to universities specifically for high-tech innovation? We in Britain—individuals as well as big corporations in the private sector—are small givers to universities, and that could be a new form of resource.

Mr. Brown: We have already made available for small and medium companies, including those that have spun off from universities, an enhanced capital investment tax relief that they can use in this financial year to expand their investment. In addition to that, by cutting corporation tax we are creating the environment in which long-term investment can take place. For university-based and other firms, the McCullagh committee is looking at how we can increase the venture capital industry's input into investment in these areas.
We are struck by the fact that there is 40 per cent. more investment of the national income in high-technology firms in the United States than in Britain—£4.5 billion is invested in high-technology companies there, and only one tenth of that in this country. That situation was not rectified under the previous Government, but we hope to rectify it.

Tax Avoidance

Mr. Letwin: What discussions he has had with his EU counterparts on tax avoidance issues. [21053]

Mr. Gordon Brown: On 1 December 1997 the ECOFIN group of Finance Ministers agreed a code of


conduct on business taxation. The code of conduct is aimed at eliminating special business tax regime loopholes, and we are working closely with our European partners and have persuaded the Commission to adopt a more rigorous and thorough application of the state aid rules in this area. In relation to multinational companies, we will keep our European partners, the G7 and the Organisation for Economic Co-operation and Development in touch with our discussion on how we modernise the tax rules on transfer pricing for multinationals and the existence of controlled foreign companies. We are publishing our proposals in these areas.

Mr. Letwin: I thank the Chancellor for that illuminating reply. In the light of the helpful comments that the Financial Secretary to the Treasury made to European Standing Committee B, when she told us that
Countries engage in unfair competition when they adopt zero or near-zero tax rates for special niche areas"—[Official Report, European Standing Committee B, 26 November 1997; c. 2.],
would the Chancellor class the Paymaster General as a special niche area?

Mr. Brown: Again, it is a measure of the modern Conservative party that Conservative Members cannot now even address the issues of Europe and taxation without reducing them to trivia.
We made an important breakthrough in December in dealing with harmful tax competition. We persuaded other countries, which had been reluctant to support those measures, to support them. We are tackling the problem of multinationals and transfer pricing in a way that the previous Government never did. I should have thought that the hon. Gentleman would welcome the measures that we are taking in all those areas.

Mr. Gapes: Does my right hon. Friend agree that the Government's measures are tough and are in the country's interests, and that it is a bit rich for Conservative Members to come out with all that criticism now, when they did nothing about the situation for 18 years?

Mr. Brown: Yes. We took measures in the first Budget to close a number of tax loopholes. We have done what the previous Government failed to do, and by doing so have raised more than £1.5 billion for the Treasury. Conservative Members who raise questions about these matters now seem to support taking action in areas where, when they were in government, they took no significant action for 18 years.

Mr. Wilkinson: Can the Chancellor give the House an assurance, following his meetings at ECOFIN and with his counterparts in other forums, that the European Union will not require the United Kingdom to extend the scope of value added tax, and that he will effectively prevent any such extension?

Mr. Brown: We have made it absolutely clear that these are matters for vetoes and for the House.

Exports

Mr. Gordon Prentice: What representations he has received from manufacturing industry about the effect on exports of the value of sterling. [21054]

The Economic Secretary to the Treasury (Mrs. Helen Liddell): Treasury Ministers receive numerous representations from business on a wide range of issues, including the impact of the strength of sterling. The Government are committed to open discussion of our economic performance with a view to achieving a shared sense of economic purpose. We take seriously the views that have been made available to us.

Mr. Prentice: I thank my hon. Friend for that reply, but is she aware that in my constituency of Pendle, 44 per cent. of employees work in manufacturing industry, as against a national average of about 19 per cent., and there are real concerns about the appreciation of sterling against other currencies? In the past year, the pound sterling has risen by 21 per cent. against the deutschmark, 16 per cent. against the yen, 16 per cent. against the ecu and 5 per cent. against the American dollar. Firms are cutting prices and profit margins just to maintain market share, and that cannot continue indefinitely. Can my hon. Friend give manufacturing industry any encouragement that matters will improve in the short term?

Mrs. Liddell: I take on board my hon. Friend's point about the difficulties being experienced in his constituency, but the CBI and British Chambers of Commerce have pointed to manufacturing industry's strong performance throughout the north-west. I welcome the fact that throughout the north-west firms are performing strongly in a range of industries, including chemicals, pharmaceuticals and food and drink. But it is important to ensure that companies face macro-economic stability so that they can plan ahead for the future, and since the Government were elected on 1 May our policies have been designed to provide the kind of economic climate that allows manufacturing industries to be competitive and to plan ahead for the future.

Mr. Clifton-Brown: Does the Economic Secretary agree that the current strength of sterling is the forgotten factor in the Government's economic and particularly monetary policy? Does she agree with the old City maxim that a 10 per cent. appreciation of the pound is equivalent to an increase of about 1 per cent. in interest rates? Will not this excessively tight monetary policy lead to one of the lowest growth rates in the European Community in two years' time? The National Institute of Economic and Social Research has calculated that we will have a growth rate of about 2 per cent. in two years' time, which will be the lowest of all 15 member states of the EU, in contrast with one of the highest growth rates under the previous Government's economic management.

Mrs. Liddell: The hon. Gentleman seems committed to trying to return Britain to the kind of stop-go, boom and bust economic policies of the previous Government—a Government who made sure that this Government inherited an economy with an inflation problem. The most sensible course of action for this economy is to obtain the climate of stability that the Government seek to achieve. We are conscious of the many pressures on manufacturing industry, and the hon. Gentleman is talking rubbish if he suggests that our attitude to sterling is to make it a forgotten problem.

Mr. John D. Taylor: Is the Minister aware that since the Dublin Government announced three months ago that


they would join the euro, the punt in southern Ireland has declined by 20 per cent. against sterling which operates in Northern Ireland, and that that is now a major barrier to trade between Northern Ireland and the Republic? Will the Government, in their role as President of the European Finance Ministers and in the context of the joint statement by both Governments on Monday on the creation of a council of the various devolved assemblies and Governments within these islands so that we can act in co-operation, approach the Dublin Government to see whether it would be possible for the pound sterling to join the euro at the same time as the Republic of Ireland?

Mrs. Liddell: The UK Government's responsibility, in their role as President of the EU, is to be open and fair in the negotiations that will take place during the next few months. Those are critical negotiations for the future of the EU and its economies. In that setting, it is appropriate to pay tribute to the extent to which the EU is contributing to the process of peace and reconciliation in Northern Ireland.
I assure the right hon. Gentleman that we shall discharge our responsibilities, as part of the presidency, with fairness and justice, and shall take into account the difficulties that different countries experience. However, when the Council of Finance Ministers meets to discuss those matters it must take into account the overall impact on all the economies of the European Union, both individually and collectively.

Mr. Sheldon: Is it not clear that the high level of the pound and of interest rates is affecting manufacturing industry much more than service industries? Will my hon. Friend therefore consider further assistance to the manufacturing industry?

Mrs. Liddell: My right hon. Friend makes a good point. There is a differential between the performance of the service sector and the manufacturing sector. Notwithstanding that, official estimates still point to continued growth in exports from the manufacturing sector. We take on board the point that my right hon. Friend makes about assistance to manufacturing industry. Indeed, the Minister for Trade has already established arrangements to assist companies in their marketing operations abroad. We have also embarked on a research programme to find the means whereby we can encourage especially small and medium enterprises to promote exports abroad and we shall continue to look closely at the matter to ensure that we create the most propitious circumstances for our manufacturing industry throughout the United Kingdom.

Research Grants

Mr. Woodward: What plans he has to impose VAT on research grants by charitable trusts; and if he will make a statement. [21055]

The Financial Secretary to the Treasury (Dawn Primarolo): There are no plans to impose VAT on research grants made by charitable trusts.

Mr. Woodward: I declare an interest in this subject. In the wake of the report by the National Council for Voluntary Organisations, which says that the impact of

the Government's Budget will be to impose on charities an additional £350 million because of the changes to advance corporation tax, will the Minister take this opportunity to rule out definitively an attempt by Customs and Excise to impose VAT on research grants for scientific purposes?

Dawn Primarolo: I made it clear to the hon. Gentleman that VAT on research grants will not be imposed on charitable trusts. With regard to the ACT changes, which the Government made on the basis of economic and long-term planning, the Chancellor recognised the special position of charities and transitional arrangements were put in place—a total of £1 billion will be spent over seven years on that issue. I am surprised that the hon. Gentleman did not go on to mention, given his commitment and involvement in charities, the Government's review of charities taxation, which is widely welcomed by all concerned in the charitable sector. When I was at the annual general meeting yesterday of the charitable taxation reform group, we had a positive discussion about the future of charities.

Job Creation

Mr. Bayley: What his priorities are for job creation at the ECOFIN meeting in York during the UK presidency. [21056]

Mr. Gordon Brown: I look forward to holding the informal ECOFIN in my hon. Friend's constituency in two months' time. I shall use the UK's presidency of the European Union to advance policies that help the unemployed to find work, ensure that we have a skilled, adaptable labour force and increase flexibility and adaptability in the labour market, to which we are committed, thereby raising the sustainable level of employment in Britain and Europe. I expect to discuss those issues at several ECOFIN meetings during the course of the next few months.

Mr. Bayley: Just over a year ago, R. R. Donnelley, which has a large print works in my constituency employing several hundred people, was teetering on the brink of closure. It has now secured a contract to print all the telephone directories for the Netherlands for the next seven years and those jobs have been secured. Does my right hon. Friend agree that that experience shows that Britain benefits from involvement in the European Union? Will he be using our presidency further to ensure that we play a full part in Europe so that this country benefits from jobs from that source?

Mr. Brown: I agree entirely with my hon. Friend. Sixty per cent. of our trade is with European Union countries: both imports and exports. We are trying to expand the single market into areas where it has not been effective in the past: not just telephone directories, but telecommunications and the energy and utilities industries. I hope that we shall make advances during the European presidency. It would, of course, be better if we had the support of the Conservative party.

Sir Michael Spicer: If the Government are really serious about giving advice at ECOFIN on reducing unemployment in European Union countries, will they tell


the French Government to uncouple their currency from the deutschmark, even if that means getting out of the exchange rate mechanism?

Mr. Brown: We have already discussed joint measures to tackle unemployment throughout Europe. At the Luxembourg summit in November, British proposals to help young people who have been unemployed for more than six months and long-term unemployed men and women who have been unemployed for more than a year throughout Europe—exactly the policies that we are pursuing in Britain—commended themselves to our European partners. Those measures will create job opportunities and give people the skills that will be effective in reducing the unacceptably high level of unemployment in Europe. Britain is leading the way in those areas.

Economic and Monetary Union

Mr. Timms: What representations he has received about the steps he is taking to prepare business for EMU. [21057]

Mr. Gordon Brown: We received a large number of representations as a result of our decision in October on economic and monetary union. We have set up a business advisory committee, and a Treasury committee is examining the preparations for EMU. The president of the Confederation of British Industry, the Governor of the Bank of England and the president of the chambers of commerce are involved in discussions on these matters. This country is committed to making those preparations now.

Mr. Timms: I thank my right hon. Friend for that answer. Does he agree that it would be wholly contrary to the British national interest for this Government or any future British Government to rule out for ever taking part in the single European currency? That is what Mr. Michael Portillo proposed yesterday, and he was apparently reflecting the views of many Conservative Members.

Mr. Brown: There are two positions that can be understood and are credible, and neither of them is held by the Conservative party. The first is to support the principle of monetary union, and the second is to oppose it. This side, supported by Lord Howe and many others, supports the principle of monetary union, whereas the other side cannot tell us what it supports. At least we now know what Mr. Portillo supports: he is totally against the principle.

Mr. St. Aubyn: Will the Chancellor tell us what he would support if there were a conflict, perhaps in the near future, between the needs of monetary policy in this country and the need for a sensible and competitive exchange rate? Which need would come first for him?

Mr. Brown: The steps that we are taking are right for Britain. The tests of economic and monetary union that I set out, and which were contained in a Treasury paper that was put before the House, will be applied by the Government according to what is in the national economic interest. The problem with the Conservative party's

position is that it cannot tell us whether it would support joining the single currency if that were in the national interest. Even if the economic consequences were entirely beneficial, the Conservative party would probably oppose it.

Mr. Grocott: The Chancellor's clear statement that our decision on membership of the single currency would be made on the basis of what was in this country's economic interests was derided by Conservative Members. Surely my right hon. Friend's view is self-evident to anyone who has examined this issue from a neutral position, and is shared by most people in this country. Does my right hon. Friend share my concern that anyone in the modern Conservative party who takes that view, including senior members such as former Chancellors, former Prime Ministers and former Deputy Prime Ministers, is described by the current Tory leadership as a has-been?

Mr. Brown: I agree with my hon. Friend. Lord Howe's letter was signed by many others, including several hon. Members, a former Prime Minister, a former Deputy Prime Minister and a former Chancellor in the last Conservative Government. They said that they
support Tony Blair and his colleagues in making the right decisions on the difficult challenges which lie ahead.
A large number of senior members of the Conservative party support the principle of monetary union and the Government's policy. Mr. Michael Portillo now says that he is totally against it as a matter of principle, and the Conservative Front-Bench spokesmen cannot tell us whether they are in favour of it or against it in principle: they say that they will wait 10 years before making their decision. That is typical of the utter opportunism of the Conservative Opposition. They were not fit for government, and they are not fit for opposition.

Taxation

Mr. Baldry: If he will make a statement on the number of (a) new taxes introduced and (b) increases in tax rates since 1 May. [21058]

The Chief Secretary to the Treasury (Mr. Alistair Darling): At the election, we made a clear promise not to increase the basic or the top rate of income tax. We have kept that promise and we will continue to keep it.
We also promised to introduce a new tax—the windfall tax on the privatised utilities. We introduced it and, as a result, we are spending just over £3 billion on the new deal for young people; we are spending £350 million on the new deal for the long-term unemployed; we are spending more than £200 million on the new deal for lone parents; and we are spending £1.3 billion on repairing the fabric of our schools. None of those things would have happened but for the change of Government.

Mr. Baldry: That is patently not an answer to my question. Anyone listening to it would have assumed that there would be only one new tax and no tax increases. We know that not to be true. There have been some 17 tax increases since the Government came to office, although before the election they sought to give the impression that


they would not increase the tax burden. Is not the simple truth that, month on month, the tax burden on the people of Britain is increasing under the present Government?

Mr. Darling: The hon. Gentleman should recall that, during the general election—I should have thought that Opposition Members might remember the general election, as I believe it left something of an impression on them—when those who presented our tax policies were rigorously examined and cross-examined by Conservative Members and by commentators, we made a promise in relation to the top and basic rates of income tax, which we have kept.
I am surprised that the hon. Gentleman did not return to the subject of advance corporation tax, as I rather thought he might. I wonder whether he noticed that in 1997 the overall return to pension funds was 16 per cent., whereas in 1996 it was only 10 per cent.

Jacqui Smith: Has my right hon. Friend found, as I have, that the Government's decision to cut VAT on fuel has been greeted with pleasure by families and by older people, and with some surprise by our constituents who are used to Governments' pledging to keep VAT at the same rate and then increasing it rather than keeping their tax promises as this Government have done?

Mr. Darling: My hon. Friend is quite right. Not only did we cut VAT on domestic fuel—in contrast to the actions of the previous Government—which has been greatly appreciated by elderly people in particular, my right hon. Friend the Chancellor announced a £200 million package to help poorer pensioners with their winter fuel bills and, of course, pensioners generally. None of that help would have been possible but for the change of Government last May.

Mr. Lilley: We might have hoped that the Chancellor himself would answer a question allowing him to defend his breach of a clear promise not to increase taxes in any way at all—the promise given by the Labour party before the election. The Chancellor, however, dodges questions about taxes just as the Paymaster General dodges taxes on his income. How do the Government justify imposing a tax of £5 billion a year on pension funds? How do they justify imposing taxes on those who have saved £50,000? Will they not make the situation worse by imposing an affluence tax on pensioners?
Does the Chancellor recall telling his predecessor that, before doing anything that would affect pensioners, he should tackle the taxation of offshore trusts?

Mr. Darling: A moment ago, my right hon. Friend the Chancellor and I were wondering why the right hon. Gentleman had not asked a supplementary question on Europe, when he might have clarified one or two points for us. For some reason he chose to say absolutely nothing.
I shall deal with the points that the right hon. Gentleman raised. The first and, perhaps, most important related to changes in advance corporation tax. We believe that it is for managers, not the tax man, to make investment decisions, and that the distortion in the corporation tax system ought to be removed. That has been widely welcomed by many people. We reduced the

corporation tax rate to a lower rate than those of any of our major competitors and there is a further reduction to come in 1999.
On the subject of pension funds, perhaps I may repeat what I said to the hon. Member for Banbury (Mr. Baldry). Overall returns to pension funds last year were 16 per cent. and were only 10 per cent. in the year before that. Abolition of payable tax credits on dividends is estimated to have affected average performance last year by about 0.4 per cent. The overall judgment is that pension funds did well last year—in no small part due to the long-term view that the Government are taking. The half-hearted attack on us by the right hon. Member for Hitchin and Harpenden (Mr. Lilley) does not have any weight, especially when one remembers what the Conservative Government did in the last Parliament and the 22 tax rises that they imposed when they had promised not to do any of that.

Casino Industry

Mr. Dismore: If he will make a statement concerning the taxation of the casino industry. [21059]

Dawn Primarolo: The gross gaming yield of a casino is liable to gaming duty.
Gaming duty is a tiered duty which ranges from 2½ per cent. to 33 1/3 per cent. The duty receipts for 1996–97 from casinos were £79 million.

Mr. Dismore: Does my hon. Friend agree that there has been no major review of casino taxation for 20 years, since the royal commission? Does she agree that we should try as far as possible to ensure a level playing field between different forms of gambling? If casinos were taxed on the same basis as bookmakers—6.75 per cent. of bets placed, rather than the sliding scale that she mentioned, which is based on bets less winnings—instead of the £79 million that she mentioned for last year, the Exchequer would have recovered £175 million out of total bets of £2.6 billion. Is it not time that we examined the matter to ensure fair play between the casino industry and the country?

Dawn Primarolo: Gaming duty was introduced on 1 October 1997 after a period of consultation. The tiered rate on casinos is based on the tax set before the new regime to ensure a fair return to the Exchequer. The gross gaming yield is the most efficient way to tax the industry. So far this year, with a quarter to go, £70 million has been raised. My right hon. Friend the Chancellor constantly reviews the relationship of all the taxes to ensure that they are set at a level that is acceptable to the industry and the Exchequer.

Alcohol and Tobacco Duties

Mr. Mullin: What recent discussions he has had with other European Community countries regarding the convergence of excise on alcohol and tobacco; and if he will make a statement. [21060]

Dawn Primarolo: I have had no discussions with representatives of other EU member states regarding the convergence of excise duties on alcohol and tobacco


products. The mechanism for progressing convergence is through the European Commission's biennial reviews of the minimum rates of excise duties. The reports on the current alcohol and tobacco reviews are overdue.

Mr. Mullin: Is my hon. Friend aware—I am sure that she is—that a vast black market has grown up in cheap booze and tobacco from the continent and that much of it is sold out of front doors and car boots to under-age youths who then cause mayhem in the communities where they live? That black market is also doing tremendous damage to our domestic brewing and tobacco industries. I appreciate that there are no easy answers to the problem, but will my hon. Friend give an assurance—I am not sure that I detected it in her first answer—that the problem is being seriously addressed?

Dawn Primarolo: I can assure my hon. Friend that in their negotiations in the European Union, the Government continue to press the case in relation to minimum rates of duty on both alcohol and tobacco. In addition, the Government have conducted a review of alcohol and tobacco involving smuggling, cross-border shopping, crime, health and competition. The report of that review will be with me soon. The industry has co-operated with us fully in order to target exactly the sort of measures that my hon. Friend identified.

Mrs. Virginia Bottomley: Is that not a typical reaction from this bossy, authoritarian Government—[Interruption.]

Madam Speaker: Be authoritarian, Mrs. Bottomley.

Mrs. Bottomley: The Government are moving hastily to ban tobacco advertising as a knee-jerk reaction, although it is well known that price is a more significant factor than advertising in tobacco consumption. I suggest that the Government take the steps that we set in hand to try to persuade other European countries to increase the price of tobacco rather than ban advertising.

Dawn Primarolo: This is not a bossy, typical reaction as the right hon. Lady suggests. We are taking a positive step, in partnership with the tobacco and alcohol industries and through the review that has been organised and led by Customs and Excise to tackle the very real problems of smuggling, particularly of tobacco products. The Government continue to negotiate in Europe on the minimum rates. The right hon. Lady is right to say that taxation is a tool in our health policy on tobacco, as is the ban on tobacco advertising.

Fiona Mactaggart: Is my hon. Friend aware of the number of jobs in constituencies such as mine that depend on duty-free shopping? What plans does she have to try to secure those jobs in view of what will happen to duty-free shopping?

Dawn Primarolo: I understand my hon. Friend's point about jobs. Ending duty-free shopping, however, is not solely a decision for our Government. Decisions on duty free require unanimity in the European Union—a unanimity that does not exist at present. The Government's position, therefore, continues to be to support the demands for a review of the impact of the duty-free regime ending in June 1999.

Savings

Mr. Syms: What is his policy for increasing saving by individuals. [21061]

Mr. Darling: This Government's policy is to encourage saving by as many people as possible. As we said in opposition and as we have said in government, it makes sense to encourage as many people as possible to save and make provision for whatever eventuality they think appropriate. To that end, we have ensured that we have the right economic conditions, with low inflation, that will encourage people to save. We have, of course, introduced specific proposals such as the individual savings account.

Mr. Syms: Will the Minister consider upping the £50,000 limit on the individual savings account, not only because of opposition to the proposal, but because of the real anger that my constituents feel? Their income is being squeezed by a man who is not only the architect of the scheme, but who has £12 million in the Channel Islands avoiding UK taxation.

Mr. Darling: The Government made it clear when we were in opposition that we would introduce the individual savings account, which extends the principles of tax-exempt special savings accounts and personal equity plans, which have been established for a number of years. The House must face the fact that both we and the previous Government have spent just over £1.3 billion a year in tax relief for the schemes. It makes sense to ask what we can do to encourage people who do not save at the moment to do so in future. The objective of the individual savings account is to increase the number of people who save, but who are at present not saving. That is good for them as individuals and good for the country as a whole.

Mr. Malcolm Bruce: I am slightly surprised that this question is not being answered by the Paymaster General. Does the Chief Secretary agree with the Treasury official who told the House of Commons Library on 5 January that tax relief on savings, after the introduction of the individual savings account, would be less than would have been available if PEPs and TESSAs had continued?

Mr. Darling: The hon. Gentleman raises two points. The Chief Secretary to the Treasury takes a great deal of interest in everything that happens in the Treasury. Indeed, I can tell any of my ministerial colleagues who read the report of this Question Time that I take a great deal of interest in what they do in their Departments. It should, therefore, come as no surprise that I should choose to deal with a subject about which I have said a great deal both in opposition and in government.
The Government do not know precisely how much they will spend on tax relief in any particular year because they do not know how many people will take up the option of saving, at the moment with PEPs and TESSAs, and in future with the individual savings account. As my right hon. Friend the Prime Minister has made clear, we are talking about rebalancing the tax relief that is available so that we encourage people who are not saving at the moment to do so in the future. There are many people who could well afford to save. It must be in their interests,


as well as in the interests of the whole country, to save. I should have thought that the hon. Gentleman and his party, if not the Conservative party, would join us in supporting an objective that is widely supported in the country.

Mr. Fallon: Will the Chief Secretary confirm that, on the current gross dividend yield, annual income from £50,000 invested in a UK equities PEP is only £1,420? Instead of punishing middle Britain for saving, will he either scrap the limit or allow people to transfer any surplus into the type of offshore trust that is operated by the taxmaster general?

Mr. Darling: Yet again Opposition Front Benchers show that they have precious little interest in the cause of promoting saving. As I said, the Government—any Government—have a choice about how to balance the total amount that they are prepared to spend on tax relief to encourage people to save. Our view is that it is far better to use the available money, which will always be finite, to encourage people on middle and lower incomes who are not currently saving and need encouragement to get into the savings culture. That is our objective. I am bound to say that the vast majority of those with an informed opinion, who have sat down and thought about the matter, support the Government's objective, which is to encourage those who are less well off to make provision for themselves.

Tax Avoidance

Mr. Spring: What is his policy on tax avoidance. [21063]

Mr. Gordon Brown: In the July Budget, we took action on the following matters relating to the issue: taxation of dividends on trading assets as trading profits; acceleration of capital allowances by finance leasing; sale and lease-back; transfers of unused past allowances; company purchase schemes; pay-as-you-earn avoidance; on VAT, in relation to the second-hand goods margin scheme, cash accounting schemes, capital goods schemes and insurance premium tax. Those actions will raise £1.5 billion over five years. We are now considering strengthening tax rules on multinationals and all other matters with a view to action in future Budgets.

Mr. Spring: Is the right hon. Gentleman aware that, in response to his announced policy to abolish PEPs and TESSAs, some important financial journalists suggested to their readers that they might move their investments offshore to avoid tax? As such arrangements are clearly condoned at the highest level of Government, would the Chancellor like to comment on those suggestions and on whether even middle-income savers should take heed of that professional advice?

Mr. Brown: People would be well advised to be wary of any advice on those issues from the Opposition. The available tax relief on individual savings accounts, PEPs and TESSAs is about £1.3 billion, which is substantial and rising, and we are committed to funds being made available in future Government budgeting. The hon.

Gentleman should think carefully about the previous Government's record on tax avoidance. We are taking action on tax avoidance; for 18 years, they failed to do so.

Mr. Rammell: Does my right hon. Friend agree that the previous two questions demonstrate a concerted campaign by the Conservative party on the issue of standards in public life, that that campaign carries no conviction and that the Government will take no lectures from the party that brought us cash for questions in brown paper envelopes?

Mr. Brown: I shall certainly take no lectures on tackling tax avoidance from Conservative Members. We have already closed loopholes to the tune of £1.5 billion and we are committed to closing loopholes in tax rules for multinationals. We are also taking action on other matters and will report in future Budgets. The problem with Conservative Members is that they have a new found interest in tax avoidance although they never took action to deal with it when they were in government.

Mr. Lilley: I come back on this because the Chancellor has consistently tried to pretend that the issues raised by the Paymaster General's trust are minor and insignificant. I submit that hypocrisy, conflicts of interest and economy with the truth are not minor matters. When he was in opposition, the Chancellor pursued such matters in respect of people who did not hold ministerial office. Will he stop hiding behind a statement issued on 8 December by the Treasury which both threatened to sue newspapers and claimed—I quote the words of the Paymaster General's solicitors:
our client does not influence the decisions of the Orion trust in any way."?
Subsequently, the Paymaster General has contradicted that and said that he did influence the trust to buy £10 million of shares in his company—his shares—and to buy and subsequently sell at a profit shares in the Coventry City Football Trust. How does the Chancellor reconcile those two statements?

Mr. Brown: The hypocrisy is people saying that they want to take action on such matters when they refused to do so when they were in government. [HON. MEMBERS: "Answer the question."] I remind the right hon. Gentleman that when he was Financial Secretary to the Treasury and was asked to take action on offshore trusts, he said that
it would impose a substantial and unreasonable burden on business."—[Official Report, 11 January 1990; Vol. 164, c. 706.]
That was his action. [HoN. MEMBERS: "Answer the question."] On the particular case of my hon. Friend the Paymaster General, which the right hon. Gentleman persists in raising, first, my hon. Friend has met all the rules that have been demanded of him in the code of ministerial conduct. Secondly, he has followed the advice of the permanent secretary to the Treasury. Thirdly, he has paid taxes in the United Kingdom to the tune of £1.5 million in the past five years. Finally, I am the person in the Treasury who makes the decisions on taxation.

Dr. George Turner: Does my right hon. Friend share my concern that the Opposition are in danger of bringing the House into disrepute? We rightly have on our agenda


a series of questions that are important to the future prosperity of the nation, yet it is clear that the real intent of the Opposition is to contribute not one whit to the discussion on tax evasion—

Madam Speaker: Order. The hon. Gentleman must put his question directly and it must concern Government policy and not the activities of the Opposition, for which the Chancellor is not responsible.

Dr. Turner: Does my right hon. Friend agree that he and the House should be addressing the important issues that the Opposition failed to address for 18 years?

Mr. Brown: I agree entirely with my hon. Friend. When the right hon. Member for Hitchin and Harpenden (Mr. Lilley) was Financial Secretary and was asked to take action on the taxation of trusts in Bermuda, he said that he would not. That is the reputation of the Opposition for taking action. The difference between them and us is that we are prepared to take the action that is necessary to close down tax avoidance.

Offshore Trusts

Mr. Nicholls: If he will make a statement on his policy on tax-free offshore trusts. [21064]

Mr. Prior: If he will make a statement on the taxation of offshore trusts. [21066]

Mr. Darling: The tax treatment of offshore trusts is being considered as part of the wide-ranging review of tax that my right hon. Friend the Chancellor announced in his Budget statement.

Mr. Nicholls: Perhaps the Chief Secretary could tell us what progress has been made on implementing the

commitment given by the Chancellor at the Labour party conference in 1996 that in future millionaires would not be able to exploit tax relief and offshore tax havens. Even allowing for the fact that bare-faced brazen cheek does not usually march hand in hand with a proper sense of shame, does the right hon. Gentleman sense any unease at having given such a commitment and then sharing the Treasury Bench with someone who was exploiting tax avoidance on a massive scale?

Mr. Darling: My right hon. Friend the Chancellor had greater success at our party conference than the hon. Gentleman had at his a few years ago.
Unlike the Conservatives, my right hon. Friend took action in his Budget to close tax loopholes. He has made it very clear that there is more action to come.

Mr. Prior: Given the Government's commitment to closing offshore tax loopholes and their commitment to high standards in public life, would it not be better if the Paymaster General was moved somewhere else?

Mr. Darling: I do not agree with the hon. Gentleman. I repeat the point that we have made time and again. For 18 years, the previous Government did nothing about closing tax loopholes. When Mr. David Shaw, of fond memory for many of us—even he was asking for something to be done—asked the now shadow Chancellor about the issue, he was told that it would
impose a substantial and unreasonable burden on business."—[Official Report, 11 January 1990; Vol. 164, c. 706.]
That is not our view. We have made it abundantly clear that we intend to take appropriate action to close loopholes. We took action in the Budget and, as I said a few moments ago, there is more to come.

Business of the House

Mrs. Gillian Shephard: May I ask the Leader of House to give next week's business—and, I hope, probably the week after's?

The President of the Council and Leader of the House of Commons (Mrs. Ann Taylor): The business for next week will be as follows.
MONDAY 19 JANUARY—Completion of consideration in Committee and remaining stages of the European Communities (Amendment) Bill.
TUESDAY 20 JANUARY—Consideration in Committee on the Government of Wales Bill (First Day).
WEDNESDAY 21 JANUARY—Until 2 pm, there will be debates on the motion for the Adjournment of the House.
Consideration in Committee of the Government of Wales Bill (Second Day).
THURSDAY 22 JANUARY—Remaining stages of the Bank of England Bill.
FRIDAY 23 JANUARY—Private Members' Bills.
The provisional business for the following week will be as follows.
MONDAY 26 JANUARY—Consideration in Committee of the Government of Wales Bill (Third Day).
TUESDAY 27 JANUARY—Opposition Day [6th Allotted Day].
There will be a debate on an Opposition motion or Opposition motions. Subject to be announced.
WEDNESDAY 28 JANUARY—Until 2 pm, there will be debates on the motion for the Adjournment of the House.
Consideration in Committee of the Scotland Bill (First Day).
THURSDAY 29 JANUARY—Consideration in Committee of the Scotland Bill (Second Day).
FRIDAY 30 JANUARY—Private Members' Bills.
The House will also wish to know that, following discussions through the usual channels, it has been agreed to increase to 10 minutes the time allocated to my hon. Friend the Minister without Portfolio to answer oral questions on the millennium experience. The change will be effective from Monday 9 February and requires a slight alteration to the current questions rota. The Departments and individuals involved have been notified. The Table Office has also been notified of the changes and a revised order of questions will be issued as soon as possible.
The Session up to the Easter break will be extremely heavy. I shall continue to try to give two weeks' notice of business, but that may not always be possible. I hope that the programme for the Scotland Bill, which has already been accepted, and that for the Government of Wales Bill, which I hope will be accepted today, will help. I am grateful to the right hon. Member for South-West Norfolk (Mrs. Shephard) for her co-operation on that.
Although I cannot yet provide definitive dates for the Easter recess, it will be for the convenience of the House if I say that it will fall in the week after Easter—the week beginning 13 April. I shall give more precise details on another occasion. It will also be of help for the forward

planning of hon. Members for me to say that my right hon. Friend the Chancellor intends to introduce his Budget on Tuesday 17 March.

Mrs. Shephard: I thank the right hon. Lady for her statement and for giving us two weeks' business. It is helpful to the House to hear something about the Easter recess and the date for the Budget at this stage in the year—and of course, we were all extremely excited to hear about the new plans for questioning the Minister without Portfolio.
In the right hon. Lady's statement, the House will have discerned the influence of the work of the Modernisation Select Committee in connection with the programming arrangements made for handling the Scottish devolution Bill on the Floor of the House. As she knows, we oppose the principle of the Bill on constitutional and other grounds, but we welcome the agreement reached on the way in which it should be debated. If the House agrees later today the arrangements for handling the Welsh Assembly Bill, that, too, will be owing in part to the work of the Modernisation Committee, as well as in part to a change of heart.
The influence of the Modernisation Committee could also be seen yesterday when the Minister of Agriculture announced that the Government would subject the legislation on the Food Standards Agency to pre-legislative scrutiny. That is very necessary in such a complex area, and will clarify the Government's plans for, among other things, taxing the food industry to pay for its own policing.
I would be grateful if the right hon. Lady would rule out now the notion that the agency should have its own Select Committee. If that were granted, by analogy we should have to have Select Committees for health and safety, highways, prisons and many other subjects. I think that the existing Select Committee system should be well able to cope with the Food Standards Agency.
There has been welcome progress in some of the areas for which the right hon. Lady is responsible, but alas, rather less progress elsewhere. I therefore ask her to arrange for an early debate on social security and other associated matters, to give the Government an opportunity to make clear the principles about which they are worrying their own Back Benchers, as well as every disability pensioner and single parent group in the country, with the briefing and counter-briefing in the Government's internal welfare wars. We should have a debate so that the House can know which Minister is in the lead. It would also be useful for us all to find out when a means test is not a means test.
Will the right hon. Lady also arrange for an early debate on Welsh affairs so that the Secretary of State for Wales can come to the House to answer the 40 questions that have been tabled on the Welsh referendum count controversy? It is no good Ministers brushing off legitimate concerns by saying that Opposition parties dislike the result of the referendum. Judging by the Welsh press, the people of Wales dislike the Secretary of State's inability to bring transparency to that matter. The people of Wales, and the people of the rest of Britain too, deserve a bit better.
Finally, according to today's edition of The Times the Minister for the Environment is due to announce sweeping changes in planning law in a written answer


this afternoon. Yesterday he batted aside questions on the matter, although he could have answered them during the debate on the Regional Development Agencies Bill.
I hope that the Leader of the House will agree that we should have a debate on that matter, given that, sadly, one of her colleagues has again ducked facing the House to be questioned on his plans, preferring yet again to give a private briefing to the press first. I hope that she thinks that that is a serious matter.

Mrs. Taylor: I am grateful to the right hon. Lady for her initial comments, especially her praise of the work of the Modernisation Select Committee. I hope that the fact that we are both members of that Committee need not prevent us from being pleased when our proposals are accepted by the House. The programming resolutions that we have been able to put forward with all-party support represent important steps forward. Credit goes to all the Members from all parties who serve on the Committee.
I am also pleased that the right hon. Lady welcomed what we have decided to do about the draft Bill introducing the Food Standards Agency. We can improve the quality of much complex legislation such as that Bill if we have appropriate consultation and on occasions scrutiny by the House.
The proposed system does not involve taxing food for policing; it is a system for improving consumer confidence, and such a move is long overdue.
The right hon. Lady asked for a debate on welfare reform. There will be plenty of opportunities outside this House as well as inside to discuss welfare issues. When we find that the Department of Social Security is spending more than is spent on education, health and law and order put together, yet poverty has increased since 1979, we can all be certain that the previous Government failed to tackle poverty. We must establish the right priorities for that Department, and there will be many occasions on which we can discuss those matters.
In respect of the right hon. Lady's comments on the Welsh referendum, I must point out that my right hon. Friend the Secretary of State for Wales is answering questions on that this afternoon. She and her colleagues will find that the issue has been totally blown out of proportion and that any problems which existed were minor and would not have affected the result, which was an endorsement of the Government's proposals.

Mr. Nigel Evans: The right hon. Lady does not know. We should have a recount.

.Mrs. Taylor: If the hon. Gentleman looks at the answers that come out this afternoon, he will be better informed on this matter.
As far as planning rules are concerned, my right hon. Friend the Minister for the Environment has not ducked facing this House. He has placed in the Library statements he has made, and he has published a consultation document to which hon. Members are welcome to respond.

Mr. Harry Barnes: Madam Speaker, you will be aware that I have persistently raised questions in the House about the maldistribution of national lottery awards, and I once received an apology from the Dispatch Box from the Minister of State in the

previous Government for his inability to supply adequate information. I have pressed upon my constituents the need to apply and I have backed them in connection with those awards.
It is therefore disappointing to discover in today's Daily Mirror that north-east Derbyshire, which I represent, is bottom in terms of national lottery awards, receiving £2.78 per head of population, compared with some areas which have received £2,000 per head of population. In those circumstances, could we have a debate on the national lottery which is not just about the changes that have taken place, but which looks back at the funding arrangements so that we can make sure that this disaster does not carry on in the future?

Mrs. Taylor: My hon. Friend knows the ways of the House very well and usually finds many opportunities to raise the issues which concern him. He will be aware that questions to the relevant Department take place in this House on Monday. That might be an opportunity for him to ask the Minister.

Mr. Paul Tyler: Does the Leader of the House recognise that some Conservatives want not just a re-run of the Welsh referendum, but a re-run of the general election in Wales? Clearly, they are still smarting from their defeat on both counts.
May I congratulate the right hon. Lady on successfully negotiating good programme motions for the Scotland Bill and the Government of Wales Bill? We welcome that, and believe that far more of the business of the House would be improved if sensible discussions took place at an early stage about the way in which Bills are dealt with. I hope that she will confirm that, in future, we will try to agree on a programme where we split a major Bill between Standing Committee and a Committee of the whole House, so that we can make sure that the details are discussed adequately in those forums.
Can the right hon. Lady give a firm assurance that we will have a debate on SI 2959, the beef on the bone ban? The former Minister of Agriculture, Fisheries and Food, the right hon. and learned Member for Sleaford and North Hykeham (Mr. Hogg), supports the ban, but other Conservative Members appear to support us. Other hon. Members from all Opposition parties support our prayer 590. Can she give an undertaking that we will have a debate on that matter on the Floor of the House as soon as possible?
Finally, on a small point, can the Leader of the House assure us that "The Code of Conduct for Ministers" applies to parliamentary private secretaries as well as to Ministers?

Mrs. Taylor: I am grateful to the hon. Gentleman for his comments about the Modernisation Committee, in which he and the hon. Member for Hazel Grove (Mr. Stunell) have played their part. I agree that programme motions can be important and can help the House to secure proper scrutiny of legislation. I also agree that there is a role for splitting Bills between the Floor of the House and a Standing Committee, but each Bill should be considered on its merits, and if we can accommodate the wishes of the House, we shall try to do so.
The hon. Gentleman will be aware that the Joint Committee on Statutory Instruments has asked for further information from the Ministry regarding the order banning


beef on the bone. That information will be produced, and then it will be possible to have a debate on the order. I envisage that debate taking place on the Floor of the House before the recess.
There are rules about the behaviour of parliamentary private secretaries and what parts of our proceedings they cannot or should not take part in. They are not as clearly laid down as those for Ministers, because PPSs clearly do not have the same responsibilities.

Mr. David Winnick: In view of the exchanges at Treasury questions concerning offshore islands and so forth, can we have a debate next week on the scandalous position whereby Dame Shirley Porter has hidden away a vast amount of her private fortune to avoid paying the £27 million surcharge that has been upheld by a court of law? Not one word of criticism has come from Tory Members over her conduct, and that shows them as the hypocrites that they are. Can the debate take place as early as possible? In view of the court's findings, should not the Government recommend to the Queen that the title, the honour, given to Dame Shirley, be taken away?

Mrs. Taylor: My hon. Friend will know that collection of the money due from Dame Shirley Porter, and indeed from the other individual involved in the case, is a matter not for the Government but for the city of Westminster and the auditor. There are clear rules regarding any honours that have been awarded and the ways in which they may have to be forfeited.

Sir Sydney Chapman: In view of the intense interest aroused by the Minister of Agriculture's statement to the House yesterday, as instanced by the fact that you, Madam Speaker, understandably could not call all the hon. Members who wanted to question him, can we have a general debate on food safety measures? In the meantime, can the Leader of the House clarify what seems to be the Government's position—that, as a result of what the Minister said yesterday, all matters and authority relating to food safety are now the responsibility, and under the control, of the Department of Health, and not the Ministry of Agriculture, Fisheries and Food? If that is not the case, can we have a statement soon to clarify the areas of responsibility of the two Departments?

Mrs. Taylor: There has always been some overlap, especially, as the hon. Gentleman will be aware, on nutritional issues. He ought to bear it in mind that, in addition to the full statement yesterday, we are to have a draft Bill, and we envisage some form of parliamentary scrutiny of that Bill. I think that that will be helpful to hon. Members of all parties; it will help to inform any future debate on the precise nature of the legislation that is introduced.

Mrs. Gwyneth Dunwoody: Is my right hon. Friend aware that IBM in America has issued a statement saying that it is very unlikely that computers controlling air traffic will be able to deal with the millennium problem? Although there is a statement from the Civil Aviation Authority saying that that will

not affect British transatlantic traffic, it seems an urgent problem that is not being addressed, so will she have an urgent talk with her opposite number in the Department of the Environment, Transport and the Regions? The House will want to have those important assurances and to know that our air traffic control system is wholly safe.

Mrs. Taylor: My hon. Friend raises an important and serious problem, and many aspects of industry in this country and elsewhere are very concerned about the progress of preparations for that event. She will be aware that, before Christmas, my right hon. Friend the Chancellor of the Duchy of Lancaster made a statement to the House about the Government's assistance with the preparations for the change in date. Many of her points have been taken on board and are being considered, not least by the committee that has been established to monitor progress. My hon. Friend the Parliamentary Secretary, Office of Public Service is present and we will ensure that all relevant Ministers are aware of her concerns.

Mr. Philip Hammond: Is the right hon. Lady aware that Budget day, 17 March, is a bank holiday in Northern Ireland? Does she feel that that is appropriate?

Mrs. Taylor: My right hon. Friend the Secretary of State for Northern Ireland was consulted on whether that date would create any problems, and it was not thought that it would.

Mr. Dennis Skinner: I wish to support my hon. Friend the Member for North-East Derbyshire (Mr. Barnes) in his request for a debate on the unfairness of the lottery pay-outs, in view of the fact that Westminster gets about £2,000 per head whereas north-east Derbyshire, part of which I represent, gets only just over £2 per head. My right hon. Friend plays a role on the Modernisation Committee and she will be aware that a Bill has been introduced this week by my right hon. Friend the Member for Chesterfield (Mr. Benn) to change the oath and prevent Members of Parliament from having to swear allegiance to the Queen and all who sail in her. Will she ensure that the Modernisation Committee considers the Bill, because it has support across the House?

Mrs. Taylor: I have not noticed a great deal of pressure for changing the oath as my hon. Friend suggests, and I and the Prime Minister have made it clear that we have no plans to do so at present. On his point about the lottery, I can only repeat what I said to my hon. Friend the Member for North-East Derbyshire (Mr. Barnes)—that questions to the relevant Department will take place on Monday. Both my hon. Friends have a great record of persisting on issues in the House and I would not be surprised to find that they are able to raise the issue of lottery grants to their area on many other occasions.

Rev. Martin Smyth: I wish to press the Leader of the House on the issue of 17 March, and I question some of the advice that Ministers get from their advisers. I also wish to press her on the issue raised by the hon. Member for Crewe and Nantwich (Mrs. Dunwoody). Will the Prime Minister, when he


meets the President of the United States, raise the issue of millennium compliance by computers? Figures published recently in the press suggest that the £370 million that the Government have allocated, as announced by the Chancellor of the Duchy of Lancaster in December, will be utterly inadequate for the task. The world depends on the leadership of this nation and the United States on the matter.

Mrs. Taylor: I have nothing to add on the subject of the date of the Budget. As I said, discussions took place and advice was sought before that date was agreed. On millennium compliance, I made the position clear to my hon. Friend the Member for Crewe and Nantwich (Mrs. Dunwoody). I know that the hon. Gentleman has taken an interest in the matter. He will know that the Prime Minister has taken a direct personal interest in developments and is carefully observing how confident we can be about compliance. He has often stressed the need to take all appropriate action on the matter.

Mr. Christopher Leslie: In recognition of the Government's determination to pursue policies that prevent ill health, will my right hon. Friend confirm that the Government intend to publish a Green Paper on public health? When will that happen, and will a statement be made?

Mrs. Taylor: The Government are committed to publishing a Green Paper on public health and will be ready to do so in the relatively near future. Under this and previous Governments, Green Papers have not always been announced to the House, but that one is especially important, and I will bear in mind my hon. Friend's request.

Mr. Charles Wardle: Yesterday the Minister of Agriculture received a broad measure of support for his proposals for the Food Standards Agency, but he said that funding for the agency had yet to be decided. When the White Paper or a draft Bill are debated, will the Leader of the House urge him to avoid placing extra inspection charges and levies on farmers, who can ill afford them after the 47 per cent. drop in farm incomes?

Mrs. Taylor: I believe that my right hon. Friend and colleagues are well aware of the pressures that exist in that industry. Part of the purpose of publishing the draft Bill and having further consultation is to allow such arguments to be made. However, ultimately it will be in the interests of everyone, including the farming community, if we can improve confidence in British food.

Mr. John Cryer: First, I should like to ask my right hon. Friend for a debate on electoral reform. We now have the Electoral Reform Commission; we also have the European Parliamentary Elections Bill, which deals in part with the way in which Members of the European Parliament are elected. Many hon. Members on both sides of the House have strong views on electoral reform, and there are even some supporters of proportional representation—I would not touch it with a bargepole, but there we are.
Secondly, I add my support to the comments made by my hon. Friend the Member for Walsall, North (Mr. Winnick), who asked for a debate on the activities of the spivs and fraudsters of Westminster city council.

Mrs. Taylor: Electoral reform was not just touched on during, but was the essence of, our Second Reading debate on the European Parliamentary Elections Bill, which will return to the Floor of the House before long. The Electoral Reform Commission is embarking on its work and it may be wiser to wait until the outcome is known before we talk about further debates in the House on the principle of the matter.
On local government and the difficulties that Dame Shirley Porter created and faces, I have nothing to add to what I said to my hon. Friend the Member for Walsall, North (Mr. Winnick).

Mr. Nicholas Soames: Opposition Members are touchingly grateful for the opportunity for an exhaustive 10-minute internal and external examination of the Minister without Portfolio's affairs; I thank the Leader of the House very much for being so good as to arrange that.
Would the right hon. Lady be good enough to arrange for a debate in which West Sussex Members of Parliament would have the opportunity to challenge the Deputy Prime Minister on the extraordinary—unprecedented—decision that he has taken to overturn examination in public of the West Sussex county council structure plan, thus causing a potential crisis in the shire counties of over-development on a scale never before seen? Such a debate would give us an opportunity to explain the enormous anxieties and concerns of our constituents.

Mrs. Taylor: I am sure that the Minister without Portfolio will be touchingly grateful for the hon. Gentleman's comments; I do not suppose that he realised he was so popular. I cannot find time for a debate on structure planning in West Sussex in the near future, but that may be an appropriate topic for an Adjournment debate.

Mr. Roger Gale: The right hon. Lady will be aware that, as a result of the Government's policies, interest rates have risen on a number of occasions, leading to rises in mortgage interest rates and causing a very significant gap in the amount paid in benefit to people on housing benefit, who, sadly, have to have their mortgage interest paid, and the real rates charged. That is especially so in the case of disabled people, who are now being caused considerable further distress by Labour proposals to cut their benefit. That distress is experienced also by the very many elderly people who are expressing concern about cuts in their benefits.
Therefore, may I reinforce the point made by my right hon. Friend the shadow Leader of the House, and ask for an urgent debate on social security issues? It really is not good enough to say that there will be plenty of opportunity to talk about that outside the House.

Mrs. Taylor: It is strange that the hon. Gentleman is denying that there is any problem in respect of social security—either spending or the fact that some people


who need help do not get it. We should all realise, not least from experience of our constituency work, that the social security system is not as comprehensive as it should be, and that it is not always the people who need help the most who get the help they want.
It is unwise of the hon. Gentleman to act in such an alarmist way and frighten people in his constituency or elsewhere about benefits that they might lose when there is no specific proposal of the type that he mentions.

Mr. Phil Willis: In view of today's publication of the Home Affairs Committee's report on police disciplinary and complaints procedures, will the right hon. Lady tell us when the report will be debated on the Floor of the House? Will she draw the Home Secretary's attention to the appalling level of secrecy that has surrounded allegations of sexual abuse and ritual initiation behaviour at Harrogate police station in the early 1990s, which have resulted in a huge financial cost to the North Yorkshire police authority? Can we be assured that the whole issue will be discussed by hon. Members—either in a Select Committee or on the Floor of the House?

Mrs. Taylor: The Home Affairs Committee report on police complaints procedures, which has just been published, is very important and the Government will study its recommendations carefully. We shall respond to the report in the near future. I am not in a position to say at present whether the report will be debated on the Floor of the House and, if so, upon what time scale—although there is provision for debating some Select Committee reports on the Floor of the House.
I shall bring the hon. Gentleman's specific points about allegations at Harrogate police station to the attention of Home Office Ministers. The hon. Gentleman may wish to try to secure an Adjournment debate or to raise the matter on the Floor of the House in some other way.

Mr. Tim Boswell: Will the right hon. Lady consider arranging for an early debate on the difficulties that the Government are having meeting their debts? Given the fact that the Government are currently legislating for a private statutory rate of interest and that, when in opposition, the Prime Minister pledged to settle debts within 30 days, will the right hon. Lady acknowledge that there is widespread and varied concern about matters as different as the delay in paying additional payments promised to pensioners, which will now not take place until well after the end of winter; and delayed compensation for confiscated handguns?

Mrs. Taylor: I do not know whether the hon. Gentleman raised that matter during Treasury questions, when it would have been appropriate to do so. I do not think that the picture is as bleak as he suggests. The poorest pensioners who will receive most help with their winter fuel bills will get that money this month. All hon. Members should welcome the Government's move to assist pensioners with their fuel bills.

Mr. Evans: The right hon. Lady has referred already to the conduct of the count of the Welsh referendum. Does she appreciate that the difference between those who

voted no and those who voted yes is 0.6 per cent.? Does she appreciate that allegations about breaches of the Representation of the People Act 1989 were made first by members of the Labour party in Caerphilly? Does the right hon. Lady also appreciate the fact that members of her party are calling for an independent inquiry, as is the editor of the Western Mail, which is a pro-devolution newspaper in Wales? Does the right hon. Lady believe that it is fair that the judge and jury in this matter is the Secretary of State for Wales? Many people believe that, if the vote had gone another way, his future would have been in jeopardy.
Does the right hon. Lady appreciate that the only way that democracy will be done, and will be seen to be done, in Wales is by establishing an independent inquiry that will examine properly all the problems that have been raised since the referendum? Perhaps an independent inquiry would request a recount of the votes.

Mrs. Taylor: The hon. Gentleman does not seem to appreciate the fact that his side lost the vote and the referendum found in favour of Welsh devolution. I do not think that he has the relevant details. If he were to examine answers to parliamentary questions and the information that my right hon. Friend the Secretary of State for Wales is to place in the Library today, he would find that his allegations cannot be substantiated. In fact, the number of disputed votes amounts to about 320. There is no case for an inquiry into the matter. The chief counting officer, Professor Sunderland, has considered the allegations and rejected the suggestion of any problem whatsoever. The Welsh referendum was won fair and square.

Mr. John Wilkinson: Could the Leader of the House persuade the Deputy Prime Minister and Secretary of State for the Environment, Transport and the Regions, no less, to make a statement to the House on the future of London Underground? Is she aware that the Labour party's manifesto for London made much of the need for a better transport system for London, and that referring to the fare increases and under-investment in the underground system, it stated that Labour would change all that? Is it not the case that fares have increased way above inflation, the problems of commuters have got worse and worse, and there is perpetual inaction on the Government's part?

Mrs. Taylor: There was a great deal of inaction in the past 18 years, which led to the present problems. The hon. Gentleman will know that questions to the relevant Department are being tabled next week, and he may want to pursue the matter in that way. He should recognise that the problems that exist in London Transport have not been created in the past few months.

Mr. Eric Forth: Is the right hon. Lady aware that there is a developing crisis in the planning regime? She will have heard the question asked by my hon. Friend the Member for Mid-Sussex (Mr. Soames) and the point raised by the shadow Leader of the House, my right hon. Friend the Member for South-West Norfolk (Mrs. Shephard), and she may be aware of the arguments in yesterday's debate on regional development agencies, all of which demonstrated that the arbitrary decisions being made by her ministerial


colleagues on planning matters are turning out to be against the interests of the rural communities and the green belt, and are a menace and danger to the way of life that many people have come to cherish. Will the right hon. Lady therefore arrange for an urgent debate on these matters, so that we can have some open government and openness about the iniquitous decisions being made behind everyone's back?

Mrs. Taylor: In the past 18 years there was a presumption in favour of development that caused many problems throughout the country. I remind the right hon. Gentleman that most planning decisions are not made by Ministers. If he has concerns about planning matters, he can respond to the consultation document that the Minister for the Environment, my right hon. Friend the Member for Oldham, West and Royton (Mr. Meacher), issued today.

Mr. Geoffrey Clifton-Brown: When are we to have a general economic debate on the green Budget, and in particular on the announcement in that Budget that TESSAs and PEPs are to be abolished? Some 750,000 savers, including some with extremely small savings—the smallest in the land—will suddenly have to pay increased tax under the policy devised by the Paymaster General, who has an offshore trust sheltering potentially millions of pounds' worth of tax not paid as a UK taxpayer.

Mrs. Taylor: I have already announced that the next Budget will be on 17 March, which will be an opportunity for all hon. Members to make speeches on the economy.

Mr. Edward Davey: I add my support to the request by the hon. Member for Hornchurch (Mr. Cryer) for a debate on electoral reform, so that the benefits of a preferential proportional electoral system can be explained to hon. Members.
Bearing it in mind that 22 January is National B6 Day, may we have a debate on the Government's proposed restrictions on the sale of vitamin B6? Does the Leader of the House realise that up to 600 health food stores throughout the country could close if the restrictions go through? Many of my constituents do not understand why the Government want to proceed with the restrictions, when people use vitamin B6 to aid their health, and the scientific evidence against it is discredited and highly questionable.

Mrs. Taylor: I have nothing to add to what I said about a debate on electoral reform. I must admit that I was not aware that 22 January is National B6 Day. The hon. Gentleman may be aware that it is also the day for Agriculture questions.

Mr. Patrick Nicholls: Will the right hon. Lady consider an early debate—if not next week, then in the near future—to consider the implications of the apology that was given earlier this week by the Japanese Government for the way in which prisoners of war were treated in the last war? Is she aware that the apology, valuable and sincere though it doubtless was, merely repeated two previous apologies that had been given over the past five years, and that what the veterans want is not simply an apology, which is obviously necessary in the first instance, but proper compensation for their sufferings?
The purpose of such a debate would be to make the Japanese Government understand that if they think that the apology is the end of the matter, it is not. Proper compensation should be paid, and the matter should be settled once and for all, before the state visit takes place.

Mrs. Taylor: Many people throughout Britain are still very mindful of the sacrifices that were made during the second world war and the suffering that took place in Japanese prison camps. We all have constituents who well remember those days and we know and understand their concerns. The Japanese Government have now shown understanding of the strong feelings that remain in the United Kingdom about that suffering. The Japanese Prime Minister recently made an official apology not just on his own behalf but on behalf of his Government, and that is why it was different.

Mr. Graham Brady: On 25 November during Foreign Office questions I asked the Foreign Secretary the straight and simple question whether he could explain to me and the House why youth unemployment in Britain has fallen rapidly during the past four years whereas it has risen rapidly in most of our major European competitor countries. He gave what I regard as a flippant response, which was:
Primarily because the number of young people in Britain has been declining."—[Official Report, 25 November 1997; Vol. 301, c. 765.]
Believing that to be inaccurate, I followed it up with a written question to the Foreign Office to which the Minister of State, Foreign and Commonwealth Office, the hon. Member for Newcastle upon Tyne, North (Mr. Henderson), who has recently entered the Chamber, gave an answer which demonstrated that the Foreign Secretary's response to me had been inaccurate. That answer said that, in the Foreign Office's estimate, 30 per cent. of the decline had been due to a decline in the number of young people in the United Kingdom, the remainder being due to economic growth and an increase in the number of people going into higher education.
Realising that there was a clear discrepancy between those two versions, I wrote to the Foreign Secretary before Christmas asking him to say which reflected the Foreign Office's view, and I was concerned to receive a response, again from the Minister of State, dated 5 January, which said that he had replied to a written question and had nothing further to add.
Given the clear statement in "The Code of Conduct for Ministers", which makes it clear that if Ministers give inaccurate information in the House of Commons they should come at their earliest convenience to the House to put that inaccuracy right, will the Leader of the House ask her right hon. Friend the Foreign Secretary to come to the House to do so?

Mrs. Taylor: I do not know whether the hon. Gentleman raised this matter with the Foreign Secretary during questions on Tuesday, and I do not know the full details or the full responses that he was given. He mentioned that he was talking about estimates and it may be that there is scope for discrepancy there, but of course I shall look into the matter.

Mr. Ian Bruce: The right hon. Lady has already answered a couple of requests for a debate on


social security and welfare reform with the suggestion that those matters can be debated outside the House. With the Prime Minister spending half of Prime Minister's Question Time refusing to answer questions on welfare reform on the basis that the review is still going on; with a debate having been refused in the House when the Prime Minister is today going out to tell the public what is happening; and when, while he was in Japan, the chairman of his association was out telling us what would be in the reforms—I suspect inaccurately—surely our constituents need us to debate the matters in the House, not to be told that we should be doing it outside.

Mrs. Taylor: I announced that the week after next there will be an Opposition day when it will be open to the Opposition to decide what they wish to debate. If they wish to debate the principles on which we should reform the welfare state, the Government would welcome that, not least because we could then draw attention to the extent to which DSS spending increased enormously while they were in government and yet poverty increased, with an increase in the proportion of families on less than half the national average income, and to the fact that when we came into office 4 million children were living in poverty. We shall be happy to discuss the backdrop against which we need to debate reform of the welfare state because of the failures of the past 18 years.

Mr. Norman Baker: Does the Leader of the House recall that, when she made her announcement about extra time for the Minister without Portfolio, there were jeers from around the House? After months of ministerial silence, he was finally called in to answer one question a month and it now seems that he will be called in to answer two questions a month. Does she recognise the fact that there was a deficit in her announcement today because the Minister without Portfolio has wide responsibility for areas of Government policy and co-ordination outside the millennium dome, and her announcement did not deal with that? He is on 11 Cabinet Committees, and he interferes, with prime ministerial approval, in areas as wide as food safety, energy and minimum pay.

Mr. Skinner: Everything.

Mr. Baker: Quite right. Why do we not have an oral slot for the Minister without Portfolio, so that, like every other Minister, he could be accountable and face questions from Opposition Members as well as from Labour Back Benchers?

Mr. Skinner: We do not want him here every day.

Mrs. Taylor: My hon. Friend seems to be in a minority on this occasion. I should like to respond to the popularity of the Minister without Portfolio. He answers questions on matters for which he is most directly responsible. He has no other responsibilities for which he is the lead Minister answerable to this House.

GOVERNMENT OF WALES BILL

Ordered,
That the Order [9th December] relating to committal of the Government of Wales Bill be discharged and that the Bill be committed to a Committee of the whole House.—[Mr. Hain.]

GOVERNMENT OF WALES BILL (PROGRAMME)

Ordered,
That the following provisions shall apply to the Government of Wales Bill—
1.—(1) Proceedings in Committee of the whole House shall be completed in seven allotted days and shall, if not previously concluded, be brought to a conclusion at Ten o'clock on the seventh day.
(2) In that Committee the Bill shall be considered in the following order, namely, Clauses 1 and 2, Schedule 1, Clauses 3 to 22, Schedule 2, Clauses 23 to 29, Schedule 3, Clauses 30 to 73, Schedule 4, Clauses 74 to 104, Schedule 5, Clauses 105 to 108, Schedule 6, Clauses 109 and 110, Schedule 7, Clauses 111 to 117, Schedule 8, Clauses 118 and 119, Schedule 9, Clause 120, Schedule 10, Clause 121, Schedule 11, Clauses 122 to 132, Schedule 12, Clauses 133 to 136, Schedule 13, Clauses 137 to 140, New Clauses, New Schedules, Clauses 141 and 142, Schedule 14, Clauses 143 to 149.

2. Proceedings on consideration and Third Reading shall be completed in two allotted days and shall, if not previously concluded, be brought to a conclusion at Ten o'clock on the second day.
3.—(1) Standing Order No. 82 (Business Committee) shall apply to proceedings on the Bill.

(2) Notwithstanding the Standing Order, not more than nine other Members shall be nominated by the Speaker to the Business Committee in respect of the Bill.
 (3) Resolutions of the Business Committee may include alterations in the order in which proceedings on the Bill may be taken on consideration.
(4) The Business Committee shall report to the House a Resolution as to proceedings in Committee not later than 19th January 1998.
(5) Any Resolution of the Business Committee may be varied by a further Report of the Committee under the Standing Order (whether before or after the date on which the Committee is to report under this paragraph and whether or not that Resolution has been agreed to by the House).

4. For the purpose of concluding any proceedings which are to be brought to a conclusion at a time appointed by or under this Order—

(1) The Chairman or Speaker shall put forthwith the following Questions (but no others)—

(a) any Question already proposed from the Chair;
(b) any Question necessary to bring to a decision a Question so proposed (including in the case of a new Clause or Schedule which has been read a second time, the Question that the Clause or Schedule be added to the Bill);
(c) the Question on any amendment moved or Motion made by a Minister of the Crown; and
(d) any other Question necessary for the disposal of the business to be concluded.

(2) Proceedings under sub-paragraph (1) shall not be interrupted under any Standing Order relating to sittings of the House and may be decided, though opposed, at any hour.


(3) If, apart from this sub-paragraph, two or more questions would fall to be put by the Chairman under sub-paragraph (1)(d) in relation to a series of clauses or Schedules to which no notice of amendment has been given by a Minister of the Crown, the Chairman shall instead put a single question in relation to those clauses and Schedules.
(4) On a Motion made for a new Clause or a new Schedule, the Chairman or Speaker shall put only the question that the Clause or Schedule be added to the Bill.

5. In this Order "allotted day" means any day on which the Bill is put down on the main business as first Government Order of the Day.
6. If any Motion is made by a Minister of the Crown to amend this Order so as to provide a greater amount of time for proceedings on the Bill under paragraph 1 or 2 of this Order, the Question thereon shall be put forthwith and may be decided, though opposed, at any hour.
7. If any Motion is made by a Minister of the Crown to supplement the provisions of this Order in respect of proceedings on any Lords Amendments or any subsequent message from the Lords relating to the Bill, the Motion may be proceeded with, though opposed, at any hour and the proceedings, if not previously concluded, shall be brought to a conclusion three-quarters of an hour after they have been commenced.—[Mr. Hain.]

Orders of the Day — European Communities (Amendment) Bill

[1ST ALLOTTED DAY]

Considered in Committee [Progress, 3 December].

[MR. MICHAEL J. MARTIN in the Chair]

Clause 1

MEANING OF "THE TREATIES" AND "THE COMMUNITY TREATIES"

Amendment proposed [3 December]: No. 66, in page 1, line 13, after '2', insert '(except paragraph 13)'.—[Mr. Streeter.]

Question again proposed, That the amendment be made.

The First Deputy Chairman of Ways and Means (Mr. Michael J. Martin): I remind the Committee that with this we are taking the following amendments: No. 67, in page 1, line 13, after '2', insert '(except paragraph 32)'.

No.68, in page 1, line 13, after "2", insert "(except paragraph 33)".

No. 69, in page 1, line 13, after "2", insert "(except paragraph 26)".

No. 70 in page 1, line 13, after "2", insert "(except paragraph 45)".

No. 71 in page 1, line 13, after "2", insert "(except paragraph 52)".

No. 72, in page 1, line 13, after "2", insert "(except paragraph 53)".

No. 73, in page 1, line 13, after "2", insert "(except paragraph 54)".

No. 75 in page 1, line 13, after "2", insert "(except paragraph 31)".

No. 76 in page 1, line 13, after "2", insert "(except paragraph 55)".

No. 7, in page 1, line 13, at end insert
`(except Article 2 paragraph 44)'.

No. 61, in page 1, line 13, at end insert 'except Article 2(16)'.

No. 25, in page 1, line 13, at end insert
`other than in Article 2, paragraph 6)'.

No. 30, in page 1, line 13, at end insert
`other than in Article 2, paragraph 12)'.

No. 31, in page 1, line 13, at end insert
`other than in Article 2, paragraph 13)'.

No. 32, in page 1, line 13, at end insert
`other than in Article 2, paragraph 14)'.

No. 35, in page 1, line 13, at end insert
`other than in Article 2, paragraph 21)'.

No. 37, in page 1, line 13, at end insert
`other than in Article 2, paragraph 23)'.

No. 38, in page 1, line 13, at end insert
'other than in Article 2, paragraph 24)'.

No. 40, in page 1, line 13, at end insert
'other than in Article 2, paragraph 26)'.

No. 41, in page 1, line 13, at end insert
'other than in Article 2, paragraph 27)'.

No. 42, in page 1, line 13, at end insert
'other than in Article 2, paragraph 28)'.

No. 43, in page 1, line 13, at end insert
`other than in Article 2, paragraph 29)'.

No. 45, in page 1, line 13, at end insert
'other than in Article 2, paragraph 31)'.

No. 46, in page 1, line 13, at end insert
'other than in Article 2, paragraph 32)'.

No. 47, in page 1, line 13, at end insert
'other than in Article 2, paragraph 33)'.

No. 48, in page 1, line 13, at end insert
'other than in Article 2, paragraph 34)'.

No. 49, in page 1, line 13, at end insert
'other than in Article 2, paragraph 35)'.

No. 50, in page 1, line 13, at end insert
'other than in Article 2, paragraph 36)'.

No. 57, in page 1, line 13, at end insert
'other than in Article 2, paragraph 44)'.

Mr. Tim Collins: I began my speech on this amendment more than six weeks ago, in December, which makes it a rather lengthy speech even by my usual standards, so I shall try not to detain the Committee for too long. However, I should like to complete the point that I was making.
We were discussing qualified majority voting, and I was advancing the case that those who want a successful Britain in a successful Europe should not want ever greater extension of qualified majority voting. Last night, the Under-Secretary of State for the Environment, Transport and the Regions, the hon. Member for Wallasey (Angela Eagle), paid me an enormous compliment by saying that I
made Baroness Thatcher look like a wet liberal."—[Official Report, 14 January 1998; Vol. 304, c. 446.]
None the less, I want Britain to succeed in Europe, and the amendment will help that to come about.
Europe must be democratic, but extending qualified majority voting will not entrench democracy. Europe also needs to be open to possible new member states in eastern Europe. It would be wrong for the European Union to become so centralised that it was impossible to admit the countries of central and eastern Europe within a time frame of five to 10 years. The risk of moving down the route of ever greater qualified majority voting is that it would become difficult to bring in those states. It would also increase the quantity of the acquis communautaires to which those states would have to sign up before they could be admitted to the Community. The pace at which the European Union was moving would also increase,

making it much more difficult for states that were coming from a standing start to catch that train, to pursue the analogy that is constantly used in European debates.
Let us take a different parallel—that of NATO. Clearly, it would be easier for some eastern European countries to join NATO, although decisions there are taken on a unanimous basis, than it would be for them to join the European Union. That demolishes the traditional argument that extending qualified majority voting makes enlargement easier.
I shall concentrate the rest of my speech on the third argument—the need for a successful Europe. Europe needs to be competitive. If Europe is to be competitive, not only within its member states and within its own borders but globally, it must be dynamic, lightly regulated and able to help business to succeed in every market on this planet. It will not proceed in that direction if it burdens businesses with ever greater regulation. That is why the contrast that is always drawn between Conservative support for the extension of qualified majority voting in the Single European Act and our opposition to further such extension is inaccurate. We supported the extension of qualified majority voting on the Single European Act because, in order to create the single market, we believed, possibly naively in some instances, but philosophically and overall correctly, that such extension would tear down trade barriers, remove burdens on business and make it easier for businesses to compete.
No one should suppose that the extensions of qualified majority voting in the Amsterdam treaty and in the Bill will result in less regulation, fewer rules and lower burdens on business. It is clear beyond peradventure that those changes will impose greater burdens on business. No one supposes that the European Commission or other member states are champing at the bit for the opportunity to regulate to have fewer social and environmental burdens: we know that they are seeking to impose more burdens.
The result of the extension of qualified majority voting provided by the Bill will be a less democratic Europe. Decisions will be taken away from national Parliaments, and will be made by institutions that, at best, lack comprehensibility and, at worst, lack any form of accountability. The great purpose for which the European Community was originally created was to expand a zone of peace and co-operation across Europe. This measure will block the expansion of the European Union, and will be an impediment to competitiveness of European countries and European businesses across global markets.
I support the amendments, and I hope that they will be passed.

Mr. Ted Rowlands: This group of amendments and, sadly, the next group, will not receive the scrutiny that they deserve. They deal with qualified majority voting, co-decision taking, institutional changes and flexibility. I have asked myself—and perhaps the Committee will think it a useful question to pose—whether the Amsterdam treaty provides a settled constitution for the European Union. How much is left to be done, and what areas are still in an unsettled state?
In our debates, including the interesting contribution that the hon. Member for Westmorland and Lonsdale (Mr. Collins) began way back in December and has just


completed, hon. Members have asked whether the changes made by the treaty achieve constitutional stability, or whether there are more to come. Such an analysis of the Amsterdam treaty is one of the most interesting areas for the Committee to consider.
I was at the meeting of the Select Committee on Foreign Affairs to which the Foreign Secretary gave his assessment of the extent to which the various changes in the treaty represent progress towards greater integration. He used robust language to explain the consequences of the Amsterdam treaty. He said:
I think that the Treaty represents three major steps forward … On the major steps forward … it demonstrates that the high tide of integrationism in Europe was reached at Maastricht and that high tide is now at something of an ebb.
Those are interesting phrases, and I recall Douglas Hurd using them when he defended the Maastricht treaty. For a start, the language itself is interesting—its tone and temperament. Perhaps I am more gullible than some, but I take comfort from its strength and robustness. It is clearly an objective of the present Foreign Secretary—and, therefore; presumably of the Government as a whole—to support the ebbing of the tide of integration. One would not use such language if that were not one's objective. The question is whether the Foreign Secretary's view of the treaty justifies such an assessment.
In subsequent evidence, the Foreign Secretary invoked, or cited, three developments in the treaty that encouraged him to believe that the tide was ebbing. I shall not dwell on this, because a later group of amendments deals with the subject, but one of those developments was the indication that subsidiarity would be justiciable under the new treaty. My right hon. Friend also took comfort from a phrase that had been introduced for the first time, requiring the Commission to respect the diversity of cultures among the nations that make up the European Union. Thirdly, my right hon. Friend had protected British interests in regard to external border controls. He also made the case to the Committee that the change in, and the limited character of, qualified majority voting was sensible, and, in comparison with the original demands, reflected the ebbing of the tide of integrationism.
Even if we accept the Foreign Secretary's assessment of the tidal condition of integrationism, we must make one huge, sad exception in respect of the enormous new tidal wave represented by monetary union. That constitutes a tidal wave of integrationism in every sense. When members of the Committee suggested as much, however, the Foreign Secretary rightly said that it was not the fault of the Amsterdam treaty, but the fault of the Maastricht treaty. I am asking—in a limited sense—to what extent the Foreign Secretary is justified in his belief that Amsterdam represents something of an ebb tide.
I have to say that the Foreign Secretary has some evidence with which to make his case in regard to qualified majority voting. It seemed from the original proposals that were scrutinised in the run-up to the Amsterdam negotiations that many EU members—at one point, apparently, most of them—had an agenda for a much greater degree of qualified majority voting than what eventually emerged.
I have read, with some interest, the various documents that have poured out of the European Parliament, and have noted their assessment of the Amsterdam treaty. I was particularly interested by a report from the Committee on

Institutional Affairs on the whole issue of qualified majority voting. What runs through that report is desperate disappointment that the Amsterdam treaty did not go nearly as far as everyone expected in terms of qualified majority voting. The committee believed that the extension of QMV constitutes a vital reform in terms of promoting efficiency, and in the context of future enlargement. I shall deal with that shortly, and shall invite my hon. Friend the Minister of State to comment.
The committee also said that a depressing feature of the Amsterdam treaty was the fact that, despite the belief of the entire reflection group that QMV should be a general rule on grounds of efficiency—with a modest number of exceptions—that objective had not emerged from the Amsterdam negotiations.
I realise that there will be differences of opinion between us on the Committee. I saw some of the committee's earlier work and the lists of what it hoped would be driven through by qualified majority voting, and my right hon. Friend the Foreign Secretary has a point. Nothing like the tidal wave of change towards integration through qualified majority voting has emerged from Amsterdam. Amsterdam put a brake on the vaulting ambitions of a number of those who had developed arguments in the reflection group and elsewhere. My right hon. Friend has a case, at least in relation to QMV and the core decision-making process. It was more modest than we had feared.
4.30 pm
It becomes clear when we read the documents—I suspect that the same is true within the Commission—that there is no settled constitutional arrangement in relation to QMV. There is no doubt that the European Parliament or the Commission will vigorously try to make QMV a general rule, with only a few exceptions, rather than the reverse.
I am going to turn on its head the argument of the hon. Member for Westmorland and Lonsdale. I believe that enlargement will be used as the excuse or reason for a massive extension of QMV. I thought that the hon. Gentleman was making the reverse case. I think that there will be a renewed battle over whether QMV is a natural, conditional necessity of enlargement.
Given the robust nature of my right hon. Friend the Foreign Secretary's remarks about the ebb tide of integrationism, in the Committee and elsewhere, from which I take comfort, when the Minister of State replies to the debate, will he state clearly that he does not believe that enlargement should be used to justify a considerable extension of QMV?
We know that there will have to be institutional changes of one sort or another as a result of enlargement. The Amsterdam negotiations could not cope with those arguments, so there will be some future gathering—an intergovernmental conference of one sort or another—to deal with the institutional consequences of enlargement.
I suspect that the next big push, the next wave—to borrow my right hon. Friend the Foreign Secretary's phrase—of integrationism will be tied to, allied with and promoted alongside enlargement. It will be argued that there will have to be much more QMV in order to make enlargement work. I agree with the Government's support for enlargement, but I plead with my hon. Friend the


Minister of State to make it clear that he will not buy the argument that the large-scale extension of QMV is an inevitable consequence or condition of enlargement. We should state now that we detach those arguments from each other, otherwise the ebb tide of integrationism, about which my right hon. Friend the Foreign Secretary gave such a robust statement, will turn out to be short-lived.
I do not know whether the draft resolution that I found among the European parliamentary papers has been amended, but even its language in draft form is revealing. I found a curious and interesting phrase, and I should be interested if my hon. Friend the Minister of State could comment on it. That draft resolution on Amsterdam, which was to be put to the European Parliament, says that the European Parliament
Considers that the Amsterdam Treaty marks the end of an historical era when the work of European unification could be undertaken, stage by stage, using the methods of classic diplomacy;
Is convinced, instead, that politics should become the driving force behind shaping the new European Union".
That is an interesting and curious observation.
What clearly upset those who drafted the resolution was that the intergovernmental conference, contrary to the wishes of those of a more integrationist nature, turned out to be a brake. IGCs generally are seen as a brake on development and integration. Those who drafted the resolution believe that we must find ways round the IGC process, because it has turned out to be an obstacle to the momentum that the integrationists want to achieve. That is what is behind the words:
Considers that the Amsterdam Treaty marks the end of an historical era when the work of European unification could be undertaken, stage by stage, using the methods of classic diplomacy".
I assume that those methods are IGC negotiations—the hard-bitten, businesslike way in which one has to get the consent of everyone, to make progress. That has turned out to be an impediment to the ambitions of those who want to go much further, who believe that that impediment should end.
I find it difficult to understand that viewpoint. Perhaps my hon. Friend the Minister of State can tell us whether there is any process other than the IGC through which the constitutional development of the European Union can take place. I do not understand how politics could be a replacement. Politics can be a driving force, but the process of classic diplomatic negotiation, represented by the IGC process, is the only procedure by which constitutional change in the European Union can take place.

Sir Michael Spicer: I have been following the hon. Gentleman's arguments carefully, and I very much agree with what he says. Is there not another constitutional process which works through the European Court and the acquis communautaire? I refer to the process by which there is a constant accumulation of power. Is that not precisely why we must at some point have a reversion of powers? It is no good just blocking things temporarily through the IGCs. We must have a reversion of powers, especially those accumulated by the court.

Mr. Rowlands: The hon. Gentleman makes an interesting point. It is true that through the acquis

communautaire and the judgments of the European Court of Justice, there has been an accumulation of power. Indeed, the court's task originally was to promote European union. A constitution could be developed through the route that the hon. Gentleman suggests, but that would not be appropriate for institutional changes or the extension of qualified majority voting. In the light of the hon. Gentleman's intervention, we might get an answer from my hon. Friend the Minister of State on that point.
Those who wrote the draft resolution were fretting at the difficulty of making rapid progress towards integration through the IGC process. They are now looking for another means of promoting that integration and getting constitutional change. I asked a question about that and the hon. Member for West Worcestershire (Sir M. Spicer), in his interesting intervention, also raised the point. I hope that my hon. Friend the Minister will reply. Is the IGC the only procedure by which constitution making can take place in the European Union, or is there some other method that can avoid the "classic diplomacy" of the IGC negotiations? That is an extremely important question.
My position on European issues is pretty well known—

Mr. Giles Radice: Tell us.

Mr. Rowlands: I am tempted, but I shall not.
I do not share the extreme interpretation of the Amsterdam treaty expressed by some Conservative Members. I remain, however, eternally sceptical and vigilant. I hope that my hon. Friend the Minister will repeatedly exercise vigilance, so that we ensure that we do not get a new tidal wave of integrationism and so that the ebb tide is real.

Mr. William Cash: The matter of qualified majority voting goes to the heart of our democracy. Ultimately, if we are to allow an incremental increase in majority voting, it will—with respect to my hon. Friend the Member for West Worcestershire (Sir M. Spicer)—be a question not so much, or exclusively, of the existence of the European Court of Justice, but of the functions to which enlarged qualified majority voting will be applied. As I said in response to an intervention of my right hon. and learned Friend the Member for Rushcliffe (Mr. Clarke), if we are to have a European Community at all, it is inevitable that there will be a Court of Justice. The key question is not whether we should have a court, but on which functions the court should be allowed to adjudicate.
In signing up at Amsterdam, the Government have substantially—massively—increased not only qualified majority voting but the co-decision procedure that will effectively give the European Parliament a veto over legislation that it is asked to consider.
The difficulties can be demonstrated in a number of examples, such as the removal of the veto—by extension of qualified majority voting—on adapting or supplementing the research framework programme or on establishing joint undertakings in research and development. The Minister of State might like to recall that, when called upon to consider the fifth directive on the research framework programme, the Minister for Science, Energy and Industry severely complained and, because of the costs, rejected the idea that there should be an extension of jurisdiction. I should be interested to know the Minister's reply on that point.
It is, moreover, equally clear that the research framework programme is merely a jobs-for-the-boys operation. There has been an enormous proliferation of agencies and of one type or another of "expert groups", which are saddling Europe's, and particularly Britain's, taxpayers with enormous costs. It is extraordinary that we should no longer be able to veto arrangements that even the Minister for Science, Energy and Industry rejected. How can the Minister of State approve of removing the veto and of allowing qualified majority voting, whereas the Minister for Science, Energy and Industry said that he does not want QMV? It is extraordinary.
What does majority voting involve? When people cast their vote in a general election, they are making a decision about the type of Government and specific programmes that they want. If we develop the concept of majority voting and of extending it in the arena of government—not only for technical and trading reasons, some of which are understandable and acceptable in increasing trade and in removing the logjam of uncompetitive practices in Europe—which is what the Amsterdam and Maastricht treaties do, it becomes apparent that the individual who casts his vote in a general election to decide the type of Government he wants will lose that right, subject only to spurious claims that there is some democracy in the Council of Ministers.
We are back to the matter of accountability. If there is insufficient parliamentary scrutiny in the European Union, it will follow that there is no genuine manner in which Ministers can be held accountable for their decisions. I have been a member of the Select Committee on European Legislation for the best part of 14 years, and it has repeatedly become abundantly clear to me that Ministers will go out of their way to ensure that any matter that causes them difficulty in their decision making is bypassed. The Government's absolute determination to pack the current European Legislation Committee with Labour Members, so that they will always have a majority, is outrageous, disgraceful and goes completely against the provisions of the protocol on the role of national Parliaments in the European Union, which the Government themselves have endorsed.
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It is no good for the Labour Government to pretend that they are somehow the leader in scrutiny arrangements, which go to the very heart of qualified majority voting, if in practice decisions are taken by a Committee packed with Labour Members and a Chairman who is himself a Labour Member—despite all the conventions established since 1972, to ensure the impartiality that is absolutely essential in making the system function properly.
The combination of the Government's actions in accepting the Amsterdam treaty and qualified majority voting and the draconian and almost totalitarian manner in which they are determined to maintain control over every aspect of the way in which this legislation is scrutinised is a contradiction and will cause them much difficulty in the next few years.

Mrs. Gwyneth Dunwoody: Surely the hon. Gentleman is missing one rather important element: the House of Commons does not properly treat its responsibilities on the flood of rubbish from Brussels. We have Scrutiny Committees that do not have teeth,

and we do not debate on the Floor of the House the decisions of those Scrutiny Committees. The reality is that, unfortunately, the Government are following the appalling example set by previous Governments, who did not tackle the problem when they should have done; they have failed disastrously to do so ever since.

Mr. Cash: I am deeply grateful to the hon. Lady for her intervention. I have enormous sympathy, based on some experience, with what she has said. Time and again, under the previous Government, I made representations in the Select Committee that those matters should be debated on the Floor of the House. Time and again, the then Leader of the House refused to accept those representations. However, the new Government are worse. The Government and the Leader of the House continuously refuse to allow those matters to be debated on the Floor of the House.
The process implicit in the idea of qualified majority voting and the democratic deficit which people constantly mention when discussing the European Parliament, is much worse when applied to national Parliaments. To include a protocol on national Parliaments at the back end of the treaty will be of value only if not only the United Kingdom but—as I deeply doubt—the rest of the Community have a fully effective scrutiny process.
I fully take the point made by the hon. Member for Crewe and Nantwich (Mrs. Dunwoody), and I sincerely hope that she will use such influence as she has—which I am sure is considerable—with the Government to ensure that they, too, understand the point. At the heart of what is happening—over time, in incremental additions—is the creation of institutional arrangements, the object of which is to create a European Union that will effectively deny to this Parliament the right to make decisions on behalf of the people who voted for us in general elections. It is a very simple matter; it is about a cross in the ballot box.
As I asked the Minister in an earlier debate, does he deny that progress in institutional integration is leading to the inevitable consequence of one country, one Europe? He knows perfectly well that it is. I suppose that some would say that, in a typically British fashion, we are allowing it to happen by increments, but it is in the provisions that we are currently debating, with respect not only to qualified majority voting, but to co-decision with the European Parliament.

Mr. Llew Smith: Does the hon. Gentleman agree that matters are worse than he has outlined, in terms of the lack of accountability and the fact that people will go to the ballot box and vote for Governments who are inhibited by such provisions? Under article 107 or 109 of the Maastricht treaty, it is illegal for democratically elected Parliaments and assemblies—I stress that, as I come from Wales—to influence the unelected and unaccountable European central bank to respond to such issues as unemployment or poverty. Therefore, the position is worse than the hon. Gentleman described, and this is one of the few occasions on which he can be accused of underestimating the problems related to the European Union.

Mr. Cash: I am grateful to the hon. Gentleman, and I am more than happy to take up his point. The voting arrangements with respect to economic and monetary union, and the flexibility arrangements that we shall


discuss when we consider the next group of amendments, are described by the Commission as the best form of flexibility that has yet been devised, yet they are governed ultimately by majority voting, and the central bankers are under a legal prohibition from seeking or taking instructions from member states. Therefore, in respect of monetary policy, which has a fundamental impact on unemployment, inflation and the whole conduct of our economy, the concept of majority voting—the Bill represents a substantial addition—is having a devastating effect on the right of the British people to make their own decisions at the ballot box. It is a complete and total abdication of responsibility and a denial of democratic accountability, which applies at the ballot box and in the Chamber. The Minister of State knows perfectly well that it is the case, and I doubt whether he would be prepared to deny a word of what I have said.

Mr. John Bercow: Does my hon. Friend agree that the hon. Member for Blaenau Gwent (Mr. Smith) has himself dangerously understated the seriousness of the issue in one key respect? It is not only not proper or permissible for democratically elected Parliaments to make representations to the European central bank about its conduct of monetary policy, but, moreover, the ones that seek to do so are potentially subject to fines.

Mr. Cash: My hon. Friend is absolutely right. They are subject to fines, penalties and sanctions.
Hon. Members will have to ask themselves some central questions about the concept of qualified majority voting and the continual denial of democratic accountability. How much further will we allow it to continue? Will we continue making speeches and operating on the basis of seeking to persuade, or will we take more immediate action?
The process is continuing in a manner that quite clearly will not be prevented by speeches and persuasion. I am convinced that the complete refusal to listen to the arguments that were engaged in respect of the Maastricht treaty and the Amsterdam treaty is leading inexorably to a position in which we shall have to take more specific action in order to stop the tide—otherwise, frankly, we are wasting our time.

Sir Michael Spicer: I hope that my hon. Friend will not sit down before spelling out what that alternative action is.

Mr. Cash: My hon. Friend will know that I do not make such a statement lightly. Indeed, there is no question but that there will come a time when the British people, who are overwhelmingly against the continuing loss of sovereignty that is implicit in the qualified majority voting arrangements, will take it no longer.
In conclusion, it is all very well for the establishment—on whichever side of the House—to continue to believe that, by encouraging the process or by not resisting it sufficiently, it will be able to allow it to continue. There is a central question before the British people, which eventually will culminate in a referendum in a few years' time. We should start preparing for that referendum

now—three and a half years ahead—to ensure that the British people have the proper information and are not deluded or misinformed by propaganda. I believe that when the time comes—and action will have to be taken in the interim—the British people will decide not to accept such provisions—in respect of qualified majority voting, co-decision or other devices—leading to the institutional integration of Europe into what will effectively be regarded as one country.

Mr. David Heath: I am a little disappointed as I was looking forward to the denouement of the speech by the hon. Member for Stone (Mr. Cash) and finding out precisely what action he was proposing and how it would manifest itself on the streets of Britain, but we must wait another day for that.
I should like to return to the speech by the hon. Member for Merthyr Tydfil and Rhymney (Mr. Rowlands), to which I listened with great care. In one respect I certainly agree with him. We are in a transitional period. The Amsterdam treaty and the intergovernmental conference left many questions unanswered and I hope that they will be answered in the near future. It is clear that the Bill and the treaty cannot be the end product.
The hon. Member for Merthyr Tydfil and Rhymney referred to the end of the historical era of classic diplomacy, but an alternative construction could be put on his words—there is a realisation that we have come to the end of the top-down assertion of the European project, where so much has been disguised or put into code. Rather, we are moving towards a stage at which progress—if there is to be progress—will be made with the assent of the peoples of Europe and with their informed consent. I suspect that the hon. Gentleman may welcome that, as I and my party do, as we believe that it is the right way forward.

Mr. Rowlands: I would like to believe that, but it is clear from the tone and tenor of the rest of the documents from which I was quoting that there is an institutional impatience among European parliamentarians that their will has not prevailed. I do not think that it was an expression from the bottom upwards, but more a political elite within Europe becoming impatient and fretting at the fact that the people of Europe were beginning to express concern about integration.

Mr. Heath: The hon. Gentleman may very well be right, but I cannot judge that without looking at the documents. Let us be optimistic that we are entering a new phase of European negotiations.

Mr. Bercow: The hon. Gentleman says that we are moving towards an era of integration by consent within the European Union. I am sure that he will agree that in order to consent to something, people must be aware of it. Will he therefore tell the Committee whether, in the course of his election campaign, he informed the electors of Somerton and Frome that he would support further extension to qualified majority voting and co-decision? Did he tell them that he favoured an increased arrogation of power to the Community institutions—yes or no?

Mr. Heath: As is so often the case, the hon. Gentleman used words that I did not use. I did not mention integration. I referred to progress on the European project,


whatever that might mean. It could indicate movement in any direction. The hon. Gentleman should listen to what I say rather than what he thinks that I say. Throughout my time in politics I have consistently said that we must be clear about those issues and put them to the British people and the other peoples of Europe to let them decide. That is why the Liberal Democrats were the first to call for a referendum on major institutional changes in Europe. That policy was finally matched by some other parties, although some were not prepared to accept the argument.
That is an aside, because we are talking about qualified majority voting. It may be an oversight, but I do not recall the speech by the hon. Member for South-West Devon (Mr. Streeter) on the subject. It was a long time ago—on 3 December—and I suspect that I may have been out of the Chamber at the time because of a surfeit of European affairs, in which case I apologise to him.
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I have read the hon. Gentleman's speech carefully to make sure that I understand his arguments in favour of removing the parts of the Bill that refer to qualified majority voting. I am not persuaded by his arguments because, although he was generous enough to make it clear that he has happily moved away from the view that the modest changes to QMV represent the end of the nation state as we know it, he failed to address the problems with the proposals in the Bill. What is the difficulty for Britain's national interest if those measures progress? He considered the matter purely as a bargaining chip for negotiation on other objectives rather than examining the value of the measures.
I often observe the inconsistency of the Conservatives' avowed commitment to the concept of enlargement and their disavowal of the processes that are necessary to enable enlargement to go ahead. Qualified majority voting is a necessary prerequisite to enlargement in some areas. I mean no offence to the Governments of applicant countries, but I would feel uncomfortable if, 10 minutes after joining the European Union, Slovenia, Cyprus or the Czech Republic had a veto on matters appertaining to the whole European Union. There should be an element of force majeure in the European Union that recognises the strength of opinion of large population groups. Qualified majority voting provides that.

Mr. Graham Brady: Would the hon. Gentleman be happier with the possibility of Cyprus, Slovenia and other new member states, 10 minutes after joining the European Union, overruling the wishes of the British Government and the British people?

Mr. Heath: It would require a strange mathematical process indeed for those small countries to be able to do that without the exercise of a veto against the wishes of the British people. That is my argument.

Mr. Brady: rose—

Mr. Heath: The hon. Gentleman has failed to make his point once. I am reluctant to let him fail to do so again.
The second point on which I failed to follow the logic of the hon. Member for South-West Devon was on the European Parliament. He appeared to suggest that,

because he did not like some Members of the European Parliament and their opinions, they should have no part in any decision-making process. I do not like the opinions of quite a few hon. Members of this Chamber, but I accept that they have a proper role in the political process. It is not entirely logical to claim that the value of an elected assembly is undermined because the hon. Gentleman takes exception to some things that some Members have said.
It would be preferable to consider the process of negotiation not simply in terms of bargaining chips and maximising advantage in other areas. That is an important part of negotiation, but we should also consider where the advantage lies for Britain in the measures that are put forward. There are clear advantages for Britain and for the European Union in the extension of QMV in limited areas. The most obvious example is the extension of QMV to measures on fraud. It would be wrong to allow individual national Governments to veto proper measures on fraud simply because they would be to their disadvantage.

Mr. Cash: Does the hon. Gentleman accept that, in the light of our experience of other member states, proposals put forward by the British Government to improve surveillance of fraud would almost certainly be rejected by other member states because they have been conducting their affairs in a certain way for so long that they will not want to change their current fraudulent way of operating?

Mr. Heath: I am not entirely prepared to accept that every member of the European Union but us is a rogue. There are examples of fraud in this country and there are other member states that are equally keen to root out fraud. However, we do not have the necessary equipment and rigour to do that. Britain has a lot to offer with our audit processes, such as the Audit Commission and the National Audit Office. We should encourage other countries to take equally rigorous steps. Qualified majority voting provides us with that opportunity.
I am not incautious about QMV. There are areas in which it would not be helpful, but the areas in the treaty are good examples of QMV being to the advantage of the European Union and of Britain.

Sir Michael Spicer: Will the hon. Gentleman give way?

Mr. Heath: I have been generous in giving way. I must finish my remarks so that we can make progress this evening.
If the European Union achieves proper subsidiarity, many of the concerns expressed by hon. Members will disappear. I share the scepticism of many about whether that subsidiarity will take root, but I recognise that there is a protocol that will enable us to monitor that. I hope that we shall move in the right direction of power being exercised at the lowest available level.
I recognise the European Parliament as an alternative Parliament with a proper electoral mandate, including British Members. It will have an improved mandate when the Bill is passed and we have sorted out our d'Hondts from our La Saintes and all the other necessary arrangements. The Members of the European Parliament could then be said to have a more proper claim to


represent the political views of this country than we shall until there are changes in our constitutional arrangements. The European Parliament will be able to hold the Council of Ministers to account to an extent. That must be right, because the Council of Ministers is immune from accountability in many ways, other than through the inadequate processes of national Parliaments. We shall have a proper avenue for parliamentary scrutiny. That must be right, ensuring proper scrutiny of matters by the elected representatives of the people of Europe. If the European Parliament, which costs a large amount of money, is not given powers to exercise properly, we must question whether it will misuse the powers that it has. We have seen examples of that in previous legislation.
The Bill is sensible. Its proposals are proportionate and will achieve a sensible outcome for this country and the European Union. I reject the arguments of the hon. Member for South-West Devon and I shall oppose them in the Lobby this evening.

Mr. Desmond Swayne: I would like to exercise the Committee by raising the concept of co-decision, as hitherto we have dealt largely with qualified majority voting. There are 25 new areas in which co-decision will operate, excluding immigration, asylum and free movement, in which it may operate progressively. So there are already 25 areas and there may be more.
The problem with co-decision is that it is being given to a Parliament that manifestly is not a Parliament.

Mr. Nicholas Winterton: It is an assembly.

Mr. Swayne: Absolutely. It is an assembly, because a Parliament requires a people and there is no European people. What is more, paragraph 3 of article 6 of the treaty purports to ensure that there should be no European people—but if anyone believes that they would believe anything. It is enough to make a cat laugh.
We have already seen all sorts of attempts to remove national differences and identities by degrees, and there is no doubt that the progression will be, as it always has been in the development of the European Union, that the cart will be put before the horse. Having created a Parliament, the Union then sets about creating a people for the Parliament to represent. However for the moment, and therefore for the operation of the treaty, there is no European people, so co-decision must be opposed.
Our European partners are clear on that point. In 1993 the Karlsruhe court ruled, in effect, that the European Parliament was not a Parliament. The French constitutional council was equally forthright, pointing out that the European Parliament
does not participate in the exercise of the national sovereignty of the French Republic".
It does not represent France; it cannot represent the French people. Therefore, it cannot represent the French people in the exercise of sovereignty as part of the people of Europe—which, as I pointed out, does not exist.
Given that there is no people for the Parliament to represent, it must be fundamentally against our constitutional principles to hand co-decision to such an

institution. The only proper institution for the taking of such decisions and the exercise of that sovereignty is this House.

Mr. Brady: We must ask what is the logic in the treaty of extending qualified majority voting and the co-decision procedures. As we think about the excellent contribution by the hon. Member for Merthyr Tydfil and Rhymney (Mr. Rowlands), we must ask whether there is a continuing tide towards European integration or whether there is an ebb tide.
I can see no logic in the extension of QMV in the context of an ebb tide of European integration. If we examine why it was first extended by the Single European Act, we see that there was a clear and specific reason—to create a single European market. However, I fear that the logic of further extension of QMV has to be seen as aiming at achieving further single integrated European structures.
Certainly we see a drive towards a single social and employment regime across the whole of Europe. There is no doubt in my mind that the further development of QMV constitutes a massive move towards further integration. Even if at present we see in the Amsterdam treaty a minor ebb in the tide that has been flowing towards integration, we must accept the fact that the process of European integration has worked over time, and continues to work, by a ratchet effect. There may be a temporary slowing in the pace of integration—

Sir Michael Spicer: My hon. Friend is making an important point about what the logic of it all is. That was the point that the Liberal Democrat spokesman, the hon. Member for Somerton and Frome (Mr. Heath), would not address. He said that he liked the measures in the Amsterdam treaty but that there were other measures involving QMV that he did not like. We were trying to intervene in his speech, because it showed that the Liberal Democrats are all over the place—or perhaps they are making a secret of their beliefs. My hon. Friend is making exactly the point that should have been addressed by the Liberal Democrat spokesman, and I look forward to his developing the theme further.

Mr. Brady: The hon. Member for Somerton and Frome (Mr. Heath) did another service by inadvertently pressing the case even further, with his remarks about the effect that new members joining the European Union might have on the dynamics of decision-making within the Union.
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The hon. Gentleman's suggestion that he was not quite sure whether he was in favour of further integration was not entirely consistent with the alarm that he apparently felt at the prospect of Cyprus, Slovenia and other new entrants having the power to prevent further integration by exercising a right of veto should the United Kingdom wish to move towards further integration.
That alarm was certainly not matched by a similar alarm about what might happen if we wished to arrest progress towards European integration and stop the loss of British sovereignty as it moves further towards Brussels and Strasbourg. The hon. Gentleman was not similarly alarmed by the prospect that new entrant countries, by adding to the weight of votes in a qualified


majority, could overrule what the British Parliament and the British Government, of whatever party, might wish to do.
That gave the game away about what the Liberal Democrats, with one honourable exception, seem to believe—that European integration is the supreme goal that we should all pursue to the exclusion of all else.
The hon. Member for Merthyr Tydfil and Rhymney said that we should soon see the prospect of a further drive towards integration, with economic and monetary union. That in itself would necessitate the harmonisation of tax and expenditure across the EU. It would drive us towards a need for co-ordinated programmes of regional and international transfer of funds, to iron out the economic differences between the member states.
As that process happens there is in prospect a further drive towards the extension of QMV and for integration not only in economic and monetary matters but in subsidiary areas. It will be believed that because we have a single currency we must have a single regime in allied respects—the same employment laws and the same social regime across the whole of Europe.

Mr. Nicholas Winterton: My hon. Friend is developing an interesting argument and drawing in support for what was said by the hon. Member for Merthyr Tydfil and Rhymney (Mr. Rowlands). Is it not true that the drive for the extension of qualified majority voting exists only because the bureaucratic oligarchy of the European Union sees it as the only way in which to achieve European integration?
Overwhelmingly, throughout the countries that make up the European Union—give or take a Belgium or a Luxembourg—the people do not want that. We have heard a lot about "the people's Europe", but the peoples of Europe do not want integration. The reason why we are driving forwards with qualified majority voting is that the oligarchy of Helmut Kohl and others see it as the only way to achieve an integrated Europe.

Mr. Brady: I am grateful to my hon. Friend. It is not only the peoples of Europe who patently do not want further integration; we can see clearly from the attendance in the Chamber and the contributions today that the people of north-west England do not want it either. I am delighted to hear a fellow Cheshire Member of Parliament make such an eloquent point against an integration that is contrary both to the wishes of the British people and to those of the peoples of other European countries.
Several hon. Members have already said that we are now seeing part of a process that is putting power, sovereignty and the sacred link between this Parliament and the British people in danger.
There are other developments, such as the advent of the Welsh Assembly and the Scottish Parliament. Last night, we were discussing the transfer of power to regional development agencies—the precursors of regional assemblies across England. All those measures compound the greatest danger, which we have seen in recent years, that the peoples of Europe have begun to feel increasingly estranged from the politicians who are meant to represent them.
It is disturbing that the Government are moving political power and sovereignty in two directions; on the one hand, to Brussels and Strasbourg, and on the other,

to Scotland, Wales and the regions. That might not matter if there were real democratic legitimacy in those institutions, but I do not believe that that is the case. The levels of interest have been shown most notably by the referendum on the Welsh Assembly, in which there was a tiny majority in favour; even that result has been called into question, as there may have been irregularities in the vote. Any similar referendums across the regions of England would show that there is no demand for any regional assemblies. If we move power to regional level on the one hand and to European level on the other, there will be a further diminution of the relationship between the people and their representatives, their elected politicians.

Mr. Collins: My hon. Friend is making an excellent point about the genuine level of European public interest. Does he agree that a problem with co-decision and with giving more power to the European Parliament is that, contrary to the point made by the hon. Member for Somerton and Frome (Mr. Heath)—who implied that the European Parliament was somehow equivalent to a national Parliament—there is not one single member state of the EU where the turnout for elections to the European Parliament is remotely comparable with the turnout for the elections to the national Parliament? In this country, it is barely half the turnout for the election to the Westminster Parliament. The people want their national Parliaments to govern them, not the European Parliament.

Mr. Brady: I could not agree more with my hon. Friend's remarks. Furthermore, the Government's recent proposals to change the method by which we elect Members of the European Parliament compound the danger by removing the representative from any kind of meaningful constitutional context. We are to have MEPs representing the north-west, an area stretching from south of Chester to the Scottish border. There will be no relevance or interest for people to vote in European elections, as they will neither know nor care for whom they are voting. No democratic control can be exercised in the European Parliament by British MEPs on behalf of the British people. That is a cause for the greatest concern. This move, embodied in the Amsterdam treaty, is another part of the process which removes political and democratic control from the British people, and it is very much to be resisted.

Mr. Crispin Blunt: I want to make only a few remarks—given the short amount of time we have to discuss this issue—about qualified majority voting and the effect that it has on a nation's ability to govern itself.
When the British Government—or, indeed, any Government—agree to extend QMV, they should do so in the sober knowledge that they are allowing their people, their Parliament and their Executive to be overruled by other countries. In terms of the Single European Act, I agreed with the case for handing away powers to ensure that opportunities for free trade could be pursued. Those of us who support free trade would argue that both sides benefit and that it is a way of getting rid of protectionism.
When the Government extend QMV into areas beyond the commercial sector, they should do so with great reservations. This Government came to office on a manifesto that contained four proposals to extend QMV. To be fair, they were endorsed by the British people at


the general election, but the Government succeeded in gaining acceptance for only one and chose to accept QMV in 13 others. In 13 new areas of policy, the Government have allowed this House, our people and themselves to be overruled by a combination of other European countries.

Mr. Cash: My hon. Friend is addressing these points with such skill that I do not want to upset his train of thought, but he said that the Government should consider giving away QMV in areas other than commercial spheres only with the greatest reservations. Does he agree that in respect of matters such as monetary union, a common defence and security policy and Government functions—all areas that deal ultimately with the right of the people to decide for themselves what sort of Government they should have—there should be a complete and total refusal to allow QMV?

Mr. Blunt: Yes. In the commercial sphere, we have been content to see QMV passed, in a sense, to the World Trade Organisation, which is able to ensure that companies can enter markets that otherwise would be protected. That is in our interest, as it is in the interests of the consumers of those markets supposedly being protected by the actions of their Governments.
I wish to address in particular the issue of the Slovenian veto. It is a canard to suggest that the little countries coming into the EU will behave in such a way as to obstruct the whole business of the EU unless we have QMV in almost every conceivable area. It is wrong to say that we cannot have enlargement without QMV. That argument is false. In terms of decision making in the EU, the pressures on a small country not to obstruct the rest of the EU are immense. The only circumstances in which they will consider behaving in such a way is if they believe that their national interests are being affected.
We must consider the bilateral regulations that these countries have with every other member state; we have seen, for example, the pressures brought to bear on Greece in terms of its dealings with Macedonia. It is only with the most serious contemplation of the consequences of exercising the veto that small countries will consider obstructing the clear will of their partner countries.
We need, as far as possible, to move by consensus to defend the vital national interests of the people of those countries. The North Atlantic Treaty Organisation works perfectly well by consensus, and achieving consensus is the purpose of negotiations. When a country's national interests are affected, the strength of individual vetoes is that their partners are forced to come to the negotiating table to identify the key issues affecting the small countries. The small countries will exercise a veto only on the most minute number of occasions when their interests are threatened. The big countries—Germany, the United Kingdom and France—represent substantial populations and have a wider range of interests. They will feel freer to negotiate more powerfully and to exercise the veto if they wish to do so.

Mr. David Heath: What about Spain?

Mr. Blunt: Spain has 36 million people—a substantial number. The hon. Gentleman is clearly referring to

Gibraltar. We saw how Spain pulled a fast one on the Government during the negotiations. Gibraltar is a subject that exercises our vital national interest.

Mr. Heath: Will the hon. Gentleman say—yes or no—whether Spain should have a veto on Britain's entry into the Schengen agreement, should Britain wish to do so?

Mr. Blunt: I am perfectly content with that in those circumstances. I am arguing here for the preservation of the veto, so it must be perfectly proper for Spain to have it. The key point about the veto is that it enables nations to protect their vital national interests. The Government have given away that power in 13 new areas, with no electoral mandate to do so.

Mr. Nicholas Winterton: Earlier in his speech, my hon. Friend mentioned Slovenia. That country wants to join the European Union, and its economy is dominated by agriculture. Qualified majority voting may not be relevant to agriculture at the moment, but is not it interesting that, in their recent discussions, the ruler of Europe—sorry, the Chancellor of Germany, Mr. Helmut Kohl—made it perfectly clear to our Prime Minister, the current President of Europe, that he is not prepared to consider any amendment to the common agricultural policy because it would be against the interests of the Christian Social Union and the Christian Democratic Union to do so before the German elections in September? Does not that show the nonsense of Europe?

Mr. Blunt: My hon. Friend makes a clear point about the conduct of the common agricultural policy. It is a separate issue from QMV, because QMV already exists in that policy, and it should properly be there because agriculture is a commercial sphere.
I would like Ministers and hon. Members of all parties who hold dear the success of the European Union to understand that it will succeed when it can move by consensus, commanding the support of the people, and that it will fail when it tramples over the rights and privileges of millions of its citizens.

Sir Michael Spicer: I want to comment on two points: the hon. Member for Merthyr Tydfil and Rhymney (Mr. Rowlands) quoted someone in the European Parliament as saying that intergovernmental conferences were a brake on the process; my hon. Friend the Member for Altrincham and Sale, West (Mr. Brady) mentioned the logic of the way in which matters are proceeding.
Of course it is right, in response to my hon. Friend the Member for Stone (Mr. Cash), when there is a proposal for 14 new areas for qualified majority voting—areas such as public health, social exclusion and research and development, none of which, incidentally, affects the single market, into which QMV was originally introduced, quite logically, with the agreement of my noble Friend Baroness Thatcher—for those of us who do not believe in a federal state of Europe to oppose it and to have a good debate. Of course it is right, when there are 27 new areas of co-decision involving a Parliament each of whose Members cost £1 million to support, that we should oppose such extensions; but the present question concerns


whether the intergovernmental conferences are a distraction, and the logic of the move towards a federal state.
If I believed in a federal state of Europe, I would do exactly what the hon. Member for North Durham (Mr. Radice) is doing today: I would sit and listen, and keep very quiet indeed, because one of the paradoxes of the present scene is that the people on the streets do not want a federal state, but someone has concocted the idea and it is now inexorably going ahead, even though I and many others cannot see any advantage whatever in it. Whatever the IGCs say, the system has been set in motion.

Mr. Radice: The hon. Gentleman and I are colleagues on the Treasury Select Committee and we know each other's views well. It is important not to use language as loosely as he sometimes does. He calls me a federalist, but I am in favour of joining other members of the European Union in areas in which it is in our common interest to do so, but not in those in which it is not. I do not believe in a European super-state as a single country. To use language so loosely is misleading, and when it comes to a referendum I shall be delighted to debate the issue with him, because I shall be able to expose the way in which he uses language and his extremely extravagant approach to this whole affair.

Sir Michael Spicer: The hon. Gentleman must speak for his own position. I do not want to debate the details with him. Let us generalise and say that the position of those who believe in a new state of Europe is precisely the one that he has just identified: they say that we will come together loosely in various areas of co-operation, yet they go along with—indeed, they encourage and fight for—common legal and monetary systems.
Once legal and monetary systems have been handed over, there is a new state. With the monetary system goes the economic system. I enjoy working with the hon. Member for North Durham on the Treasury Select Committee, and we debate these matters, but while I do not accuse him of being a federalist, the position that he has just enunciated is precisely that of those who want a federal state of Europe. They take such an apparently balanced approach because it is convenient to do so. They talk of a little bit here and a little bit there, but at the end of the day they want the central core of what constitutes a new state of Europe.

Mr. Bercow: Will my hon. Friend give way?

Mr. Swayne: Will my hon. Friend give way?

Sir Michael Spicer: I seem to have a lot of hon. Friends. I give way to my hon. Friend the Member for New Forest, West (Mr. Swayne).

Mr. Swayne: I thank my hon. Friend. The vision that has been enunciated, in which we co-operate where we want and do not where we do not, is simply not available, because of the acquis communautaire. Once a competence has been achieved, there is no way back even if we decide that it is not in our interest to co-operate. The whole business of qualified majority voting reinforces that and makes the process irreversible.

Sir Michael Spicer: My hon. Friend has made the second half of my speech much better than I could have

done. I could not agree with him more. Let us now hear what my hon. Friend the Member for Buckingham (Mr. Bercow) has to say.

Mr. Bercow: I thank my hon. Friend for his generosity in giving way. Does he agree that there is a disconnect between the words uttered by Labour and Liberal Democrat spokesmen and the reality of the policies for which they vote, and that in order to make credible their claim not to be federalists they must, at the very least, identify examples of requests for extensions of QMV that they have opposed and that, better still, they should be able to cite examples of occasions on which they have sought the repatriation of powers away from the institutions of the European Union to the House of Commons?

Sir Michael Spicer: I completely agree with that. Several of us have tried to winkle that point out of the hon. Member for Somerton and Frome (Mr. Heath) during this debate. It is absolutely right that, if one picks and chooses but basically goes along with the process—with the logic, as my hon. Friend the Member for Altrincham and Sale, West said—not only must one justify the end point towards which one is heading, about which the Liberal Democrats tend to be vague or even disingenuous, but, if one thinks there is a distinction to be made between those things that should and should not be accepted, one should say where the line is to be drawn and what the principles are behind that line-drawing process. The Liberal Democrats do not do that, so I could not agree more with what my hon. Friend said.
I wish to develop briefly my point about IGCs. The hon. Member for Merthyr Tydfil and Rhymney made an interesting and valuable speech. He asked some interesting questions and I hope that the Government will answer them. Among those questions was whether the IGCs represent a brake on the process. In my view they are becoming a distraction and are convenient for those who wish the process to continue its inexorable way.
Various treaties in the past—notably Maastricht—laid down a momentum, a logic and a set of institutions, especially on the acquis communautaire and other political objectives that the European Court of Justice can now interpret as it thinks fit. The court may now enter territory previously untrodden by law and even create—or at least give backing to—new institutional arrangements, which make the IGC discussions almost irrelevant and, at worst, a distraction from what is really happening in Europe. After all, Governments usually get their way. The great hope on Amsterdam is that the Danes will veto it at the end of March, but if that does not happen the process will continue.

Mr. Nicholas Winterton: If memory serves me correctly—I speak as an officer of the all-party Denmark group—the Danes have voted against European issues in the past, especially the Maastricht treaty. What did the masters of Europe do on that occasion? To get their way, they forced the Danish Government to hold a second, and unprecedented, referendum.

The First Deputy Chairman: Order. The hon. Gentleman keeps making speeches, not interventions, which should be brief.

Sir Michael Spicer: I answer my hon. Friend rather blushingly, because unfortunately the presidency was held


by the British Government when the Danes were being bullied on that point. The legitimacy of that second referendum is certainly open to question. However, I shall leave that point, because we are discussing the future and Amsterdam and the only possible brake on the process is a Danish vote against it.

Mr. Winterton: Will the same thing happen?

Sir Michael Spicer: My hon. Friend asks an interesting question, but we have on record a Government statement that the same thing probably will not happen. Back in July, I asked the Government what plans they had for the implementation of the Amsterdam treaty if it is not ratified by one or more member states. The Minister with responsibility for European issues replied:
The Treaty must be ratified by all 15 Member States in accordance with their respective constitutional requirements, before it can come into force. Should any Member State fail to ratify the Treaty, it could not be implemented in its current form."—[Official Report, 16 July 1997; Vol. 298, c. 186.]
We therefore have a firm position from the British Government on the issue.

Mr. Winterton: That was also the case in the past. The Danes were supposed to ratify the Maastricht treaty by 31 December of the year in question. They failed to do so and the second referendum took place after that date. Will not the masters of Europe resort to the same duplicitous actions as they have in the past?

Sir Michael Spicer: It would certainly be a resigning matter for Foreign Office Ministers if they ratted on deratification in that situation. I must draw my remarks to a close because I had not intended to speak at such length.
If the IGCs are a distraction from what is really going on—the inexorable advance towards monetary union, via Maastricht, the ECJ, the acquis communautaire and the other principles that the court has established—the discussions at them cannot achieve very much. If we as a nation believe in the continuation of the independence of the nation state—and all the other issues in which the hon. Member for North Durham said that he believes—the Government of the day must make a firm decision to retrieve powers from the European Court.
My right hon. and learned Friend the Member for Folkestone and Hythe (Mr. Howard) is one of the few people who has given specific examples of areas in which he wants a retrieval of powers. Once powers had been retrieved in any area, the acquis communautaire would have been torn apart and we would have started the process of bringing powers back to this country. That is what is now at stake, because we have moved on from discussions about tinkering at the margins of the process. We must of course argue against any extension of powers, but in reality the process will be stopped only if we retrieve powers from Europe. Any retrieval will demand the breaking apart of the acquis communautaire and, one day, someone will have to grasp that issue.

Mr. Nicholas Winterton: I shall be brief, but I wish to touch on one or two of the issues that you felt I was speaking on at too great a length in my interventions, Mr. Martin.
I understood that all the countries of the European Union had to ratify the Maastricht treaty—we are talking of an extension of the Maastricht treaty when we discuss Amsterdam—by 31 December of the year in question. Some countries ratified the treaty by way of referendum. France held a referendum although, even in a country that is at the heart of Europe, the majority for a yes vote was only 1.5 per cent. over the no vote. In Denmark, there was a no vote, but the establishment, the powers that be, the bureaucratic oligarchy that now governs Europe—because we have not a people's Europe but one ruled by a limited number of people who wield considerable power—forced the Danish Government and people to hold a second referendum after the date by which the Maastricht treaty should officially have been ratified.
I speak with some knowledge of the issue, because I visited Denmark with colleagues from both sides of the House and talked to all the political parties. I regret to say that a number of the parties that had voted no and campaigned for a no vote in the first referendum campaign told me that they would not campaign for a no vote in the second referendum. That was not because they did not want a no vote, but because they did not believe that the United Kingdom would support them as it had promised. Those political parties did not wish their country to be isolated in Europe.
It is clear that the overwhelming majority of people in the countries of the European Union do not want a federal Europe, or any further integration of their cultures or laws. They certainly do not want an integration of their currencies. By the way, if the hon. Member for North Durham (Mr. Radice) believes that a single currency would not lead to a federal Europe, he is living in fairyland. Undoubtedly, if any country loses control of its currency it loses control of its economy, and if it loses control of its economy, it loses control of the country and the government of that country, and that inevitably means that its people become subservient to some other form of government, which in this case would be Brussels and Strasbourg.
The hon. Member for North Durham is living in cloud cuckoo land if he believes that he is in favour of a nation state and is not in favour of a federal Europe, because much of what he stands for will inevitably lead to a federal state of Europe. Any extension whatever of qualified majority voting is another notch on the ratchet to integration and to a federal Europe. For that reason, I strongly oppose what the Government are seeking to do.
It is not easy to stand up against the power of Government. I did it when the Conservative party was in government; I have done it previously when I have been in opposition. I find opposition quite easy to understand and to accept. As I have said in the Chamber before, some people say, "The hon. Member for Macclesfield has been in opposition for all of the 26 years that he has been in the House." However, Mr. Martin, let me say to you and the Committee, that there has never been an occasion in those 26-plus years when I have not sought to represent what I, personally, fervently believe to be the interests of the people of the United Kingdom, and especially the people of the Macclesfield constituency, whom I have the great honour to represent.
Any extension of qualified majority voting is not merely to ensure the better implementation of the Single European Act and the single market. I believe in the free market. I also believe in fair competition and a level


playing field. I believe that the hon. Member for North Durham—for whom I have the greatest affection and regard—believes fervently in everything that he says, but I believe that he is fundamentally wrong in much of what he says and believes. He could not have highlighted that better than by the intervention that he made on my hon. Friend the Member for West Worcestershire (Sir M. Spicer). My hon. Friend challenged him about a single currency. For the hon. Gentleman to say, as he did, that a single currency for Europe will not inevitably lead to a single Government in Europe and a federal states of Europe, shows that he must be living in an entirely different world from myself.
Sadly, we shall not win the argument. As my hon. Friend the Member for Altrincham and Sale, West (Mr. Brady) said in his excellent speech, the people of this country do not want a federal Europe. They do not want any further integration into Europe. They want to work as a nation state within Europe. They want the free market of Europe, but they do not want a federal state of Europe. That is clearly shown by the level of interest in Europe, as my hon. Friend said—

The First Deputy Chairman: Order. It may help the hon. Gentleman if I remind him that the subject of amendment No. 66 and the other amendments grouped with it is "Qualified Majority Voting and co-decision procedure"—not a federal Europe.

Mr. Winterton: If "Qualified Majority Voting and co-decision procedure" has nothing to do with a federal Europe, Mr. Martin, I do not know what does have anything to do with it. I am—

The First Deputy Chairman: Order. There could be a connection, but I am saying that that is the idea of amendments: that they are specific, and that the hon. Gentleman must tie himself into the specifics of the amendments before us and not go too wide.

Mr. Winterton: That is what I am trying to do. Mr. Martin, I find your comments remarkably effective, and I take your advice. From the Opposition Back Benches, I can accept the way that you have put it very readily.
I am saying to the Committee, with great emphasis—in support of my hon. Friend the Member for Altrincham and Sale, West—that the people of this country do not want what is being done in their name. They do not want further co-decision making; they do not want further integration; they do not want what inevitably flows from what is happening in that area—and they have shown it by their lack of interest in voting in elections. If it is the people's will, the people will reflect that by going out to vote.

Mr. Denis MacShane: They did on 1 May.

Mr. Winterton: I say to the hon. Gentleman, who has a wonderful apartment in some ski resort and who is extremely good on the ski slopes—the hon. Member for Verbier, or is it Les Diables?—that, in any European election, the vote is less than half of that in a parliamentary election. People believe in their national Parliament, not in the European assembly.
I am saying that we do not want further transfers of power and I believe that, as history proceeds, the speeches that have been made by Conservative Members will be shown to have reflected the views of the British people.

Dr. Rudi Vis: The hon. Gentleman says that the low turnout in Britain for European elections suggests that there is no desire on the part of the British people to come closer to Europe. In my country of birth, the Netherlands, where there are many federalists—and I am one—by the hon. Gentleman's definition, the turnout in the European elections is no higher. That shows that there is no evidence, empirical or otherwise, in the points that the hon. Gentleman just made.

Mr. Winterton: That is a matter of opinion, and I only hope that the Government of the day have the courage to put the whole matter of Europe to a referendum in this country. They have promised to do so, as have the Conservative party and the Liberal Democrat party.
In answer to the hon. Gentleman, I suspect that my view will be proved to be the one that represents the majority view of the British people. He said that the view that I expressed about the level of turnout in elections was not relevant; I can say only that I believe that it is. The Labour party received a very substantial vote in the general election on 1 May. Members of the Labour party took full credit for that; they said that it gave them a mandate. I am not sure that a mandate of about a 28 to 30 per cent. turnout in a Euro-election gives those who are Euro-federalists the mandate that they seek. I believe that it does the opposite.
I say to my hon. Friends that I concur entirely with the arguments that they have advanced. As a believer in history, I believe that history, which is the best teacher in life, will prove us, in due course, to have been right.

The Minister of State, Foreign and Commonwealth Office (Mr. Doug Henderson): It is difficult to know where to start, given that we began this debate in early December and have been going for about an hour and a half this afternoon.
We have all enjoyed the opposition of the hon. Member for Macclesfield (Mr. Winterton) during his 26 years in Parliament. I have watched, enjoyed and respected his opposition in the 11 years that I have been in the House, and I enjoyed it no less today.
I was surprised by the contribution from the hon. Member for Stone (Mr. Cash), whom I had always believed to be the hard rock of anti-Europeanism in the House. The hon. Gentleman conceded that qualified majority voting might be desirable in some circumstances related to trade. I am beginning to think that he has gone soft compared to some of his colleagues who joined us at the last general election. However, those hon. Members who joined the hon. Gentleman in previous debates, such as the hon. Member for West Worcestershire (Sir M. Spicer) and the hon. Member for Macclesfield, redeemed the reputation of the old guard in their contributions.

6 pm

Mr. Cash: The hon. Gentleman will know that I have argued consistently in favour of free trade in Europe. I have also argued that the Single European Act is


acceptable—although it needs reform—because it delivers just that. The Minister fails to distinguish the difference between qualified majority voting on trade and commerce and matters of that kind and QMV in the arena of government, which is what monetary union and common foreign and defence policies and so on are about. There is a fundamental difference. I said earlier that I am concerned about the answer to the question, "Who governs Britain?" and about the democratic rights of the British people. For that, I shall fight to the death.

Mr. Henderson: I am glad to hear the hon. Gentleman's protestations—he obviously does not want to be left out of the coterie comprising his hard-line anti-European colleagues.
I shall begin by referring to the contribution of the hon. Member for South-West Devon (Mr. Streeter) on 3 December. In essence, he made the accusation that the treaty and the clauses to which we are referring in this debate have transferred influence and power from this Parliament to the organs of the European Union. He claimed that that was a damaging process and that the Government have given away power without charge. In later debates today, and possibly on Monday, I shall turn to what has been achieved and at what cost. I am happy to explore that issue now, but I shall have to repeat myself later.
I shall restrict my comments to the question of qualified majority voting. It is not acceptable for the Opposition to argue that, ideologically, there is no case for extending qualified majority voting. They claim that, if we agree to qualified majority voting, it will be the end of a democratic European Union. That is the accusation levelled by Opposition Members. However, they should recall that the previous Conservative Government agreed to 15 extensions of qualified majority voting in the Amsterdam treaty and 12 extensions in the single market. There were 30 extensions of qualified majority voting in the Maastricht treaty, which enjoyed Conservative Front-Bench support. In case I should forget, I am sure that the hon. Member for Stone would remind me that not all of those extensions were related to economic and trade matters—some of them went beyond that classification.
It ill behoves the Opposition to complain about the extension of qualified majority voting as a matter of principle. That does not mean that I shall endorse qualified majority voting on every issue that comes before the institutions of the European Union—that is not my position. However, when it is in the interests of Britain and of the European Union to support the extension of qualified majority voting, I think that Parliament has a responsibility to consider those matters objectively and to deal with each issue as it arises.
It is not acceptable to oppose the anti-fraud provisions in the Amsterdam treaty because it is claimed that they will lead to further integration of the European Union—to which the Opposition are ideologically opposed. Those measures are crucial if we are to ensure that the money of British taxpayers and of taxpayers throughout the European Union is used effectively and spent in the manner intended. That is why it is essential to extend qualified majority voting.
If the finger were pointed at a country and redress demanded because of the misdemeanours of that country's officials or institutions, without qualified majority voting,

it is extremely unlikely that the European Union—as a corporate organisation—would be able to ensure that that country used the money that it was allocated for that intended purpose. If there were no qualified majority voting and if unanimity were required, that country could veto any measures proposed. That is clearly a nonsense. If one believes in an effective European Union, any objective examination of the issues leads one to conclude that qualified majority voting must be extended in that case.
My hon. Friend the Member for North Durham (Mr. Radice) summed up the effect of the treaty's provisions, which will afford the limited extension of qualified majority voting and co-decision. When matters are agreed only by majority, it makes sense to allow the European Parliament to have a say on those issues also so that minority groups have another opportunity to air their views. That is essential if we are committed to the effectiveness of the European Union.
My hon. Friend the Member for Merthyr Tydfil and Rhymney (Mr. Rowlands) raised several points in his contribution today. The question whether a settled constitution has been achieved in the European Union as a result of the treaty of Amsterdam has no answer. The hon. Member for Macclesfield mentioned history. History tells us that we can never predict what will happen in the future—and it is often foolish to try to do so.
There have been many changes in Europe in the past 10 years, to which the European Union must respond. For many years, both sides of the House condemned the political and economic structures of central and eastern Europe and demanded change. When totalitarianism was overthrown, we had a responsibility to respond—to offer the hand of friendship to the people of central and eastern Europe and, where necessary, to change the way in which we operate politically in the European Union to accommodate their needs and priorities. That makes sense. I do not believe that there will ever be a settled constitution politically. Change will occur in any dynamic process—and it is right that it should.
Those who oppose further change in the form of more co-operation within the European Union are engaging in the politics of the past. That is the politics of isolation and remoteness, and it ignores the changes that are taking place in the world. As a country that seeks to provide a democratic example to other parts of the world, we should look forward. We should judge issues on their merits and consider when it is in our interests to enter into international agreements with other countries through the European Union and in other forums. We should begin to make those changes that are necessary to ensure that we are forward looking and can respond to the real issues.

Mr. Llew Smith: My hon. Friend said that we should take the lead and set a democratic example to other countries. I am sure that every hon. Member agrees with that. However, what sort of democratic example is set by article 109 of the Maastricht treaty, which makes it illegal for a democratic and accountable Parliament to put pressure on, or try to influence, an undemocratic and unelected European central bank? Does my hon. Friend accept that that is what the treaty says? Will he comment on that point?

Mr. Henderson: My hon. Friend knows that that is a narrow point—although I concede that it is an important


one. We must look at a much wider area of economic involvement. When Britain signed up with the International Monetary Fund in 1944, it was the beginning of co-operation on economic matters. In that sense, Britain could no longer adopt an economic policy, regardless of what the IMF would say about it. That was not possible under the agreements that were reached. We are witnessing an extension of international agreements over a wide area. The European Union is one of the principal extensions. The matter must be seen in that democratic context.

Mr. Cash: On a point of order, Mr. Martin. It is outrageous for the Minister to refer to international agreements. He knows perfectly well that that is a matter of a legal framework; it is nothing to do with international agreements.

The First Deputy Chairman: The Minister has been in order.

Mr. Llew Smith: Does the Minister accept that it is right that democratically elected Parliaments and assemblies, as we shall have in Wales, will not have the legal right to try to influence an undemocratic and unaccountable European central bank? That is not a narrow point, because it relates to the power of Parliament. If we as a Parliament do not have that right to control our community, people will increasingly pose the question, "What is the use of elections, if the people for whom we vote do not have the power to change things, and the people for whom we do not vote—that is, the European central bank—have those powers?"

Mr. Henderson: I say to my hon. Friend that we operate in a global world. There are international economic links of immense importance to his constituency, as to mine and to most constituencies in this country. It is necessary for us to view economic policy in that context. This Parliament has the ability to take the Executive out of office, if it chooses to do so. That is one way in which the Government, contributing through their decisions to the decisions in Europe, are accountable to the people. I stick to that.

Mr. Rowlands: rose—

Mr. Henderson: We have had a long debate, starting on 3 December. We have had an exhaustive discussion this afternoon. I do not accept the amendments.

Mr. Gary Streeter: I should be delighted to give way to the hon. Member for Merthyr Tydfil and Rhymney (Mr. Rowlands), something that the Minister failed to do. I think that we know why.
The Minister's response to the debate, like his negotiating performance at Amsterdam, has been extremely disappointing. He has failed to explain why, at Amsterdam, the Government made so many concessions, with so little in return. He has failed to deal with the excellent points raised by his hon. Friends about enlargement being used as an excuse for further QMV. He has failed to deal with the substantial points raised by many of my hon. Friends about the ratchet effect of QMV and co-decision. He has again used the bogus argument about voting arrangements on fraud.
Why does not the Minister accept that no one is talking about enforcement measures being drawn up by unanimity? We are talking about making the law itself on fraud by unanimity, and the enforcement measures by QMV in the ordinary course of events. We have made the point repeatedly.
The Minister's response has been woeful. He has failed to deal with the arguments. We are left with no alternative but to press the matter to a Division.

Question put, That the amendment be made:—

The Committee divided: Ayes 135, Noes 284.

Division No. 129]
[6.13 pm


AYES


Ainsworth, Peter (E Surrey)
Heathcoat-Amory, Rt Hon David


Amess, David
Horam, John


Ancram, Rt Hon Michael
Howard, Rt Hon Michael


Arbuthnot, James
Howarth, Gerald (Aldershot)


Atkinson, Peter (Hexham)
Hunter, Andrew


Baldry, Tony
Jackson, Robert (Wantage)


Bercow, John
Johnson Smith, Rt Hon Sir Geoffrey


Blunt, Crispin



Body, Sir Richard
Key, Robert


Boswell, Tim
King, Rt Hon Tom (Bridgwater)


Bottomley, Rt Hon Mrs Virginia
Laing, Mrs Eleanor


Brady, Graham
Lait, Mrs Jacqui


Brazier, Julian
Lansley, Andrew


Brooke, Rt Hon Peter
Letwin, Oliver


Browning, Mrs Angela
Lewis, Dr Julian (New Forest E)


Burns, Simon
Lidington, David


Butterfill, John
Lilley, Rt Hon Peter


Cash, William
Lloyd, Rt Hon Sir Peter (Fareham)


Chapman, Sir Sydney (Chipping Barnet)
Loughton, Tim



Luff, Peter


Chope, Christopher
MacGregor, Rt Hon John


Clappison, James
McIntosh, Miss Anne


Clark, Rt Hon Alan (Kensington)
MacKay, Andrew


Clark, Dr Michael (Rayleigh)
Maclean, Rt Hon David


Clifton—Brown, Geoffrey
McLoughlin, Patrick


Collins, Tim
Madel, Sir David


Cran, James
Malins, Humfrey


Davis, Rt Hon David (Haltemprice)
Maples, John


Dorrell, Rt Hon Stephen
Mates, Michael


Duncan, Alan
Maude, Rt Hon Francis


Duncan Smith, Iain
Mawhinney, Rt Hon Sir Brian


Evans, Nigel
May, Mrs Theresa


Faber, David
Moss, Malcolm


Fabricant, Michael
Nicholls, Patrick


Fallon, Michael
Norman, Archie


Flight, Howard
Ottaway, Richard


Forth, Rt Hon Eric
Page, Richard


Fowler, Rt Hon Sir Norman
Paice, James


Fox, Dr Liam
Paterson, Owen


Fraser, Christopher
Pickles, Eric


Gale, Roger
Prior, David


Garnier, Edward
Randall, John


Gibb, Nick
Redwood, Rt Hon John


Gill, Christopher
Robertson, Laurence (Tewk'b'ry)


Gillan, Mrs Cheryl
Roe, Mrs Marion (Broxbourne)


Goodlad, Rt Hon Sir Alastair
Ross, William (E Lond"y)


Gorman, Mrs Teresa
Rowe, Andrew (Faversham)


Gray, James
Ruffley, David


Green, Damian
St Aubyn, Nick


Greenway, John
Sayeed, Jonathan


Grieve, Dominic
Shephard, Rt Hon Mrs Gillian


Gummer, Rt Hon John
Simpson, Keith (Mid-Norfolk)


Hague, Rt Hon William
Spicer, Sir Michael


Hamilton, Rt Hon Sir Archie
Spring, Richard


Hammond, Philip
Stanley, Rt Hon Sir John


Hawkins, Nick
Streeter, Gary


Hayes, John
Swayne, Desmond


Heald, Oliver
Syms, Robert






Tapsell, Sir Peter
Whittingdale, John


Taylor, Rt Hon John D (Strangford)
Widdecombe, Rt Hon Miss Ann


Taylor, John M (Solihull)
Wilkinson, John


Taylor, Sir Teddy
Willetts, David


Thompson, William
Wilshire, David


Tredinnick David
Winterton, Mrs Ann (Congleton)



Winterton, Nicholas (Macclesfield)


Trend, Michael
Woodward, Shaun


Tyrie, Andrew
Young, Rt Hon Sir George


Viggers, Peter



Walter, Robert
Tellers for the Ayes:


Wardle, Charles
Mr. Stephen Day and


Wells, Bowen
Mr. Nigel Waterson.


NOES


Abbott, Ms Diane
Corbyn, Jeremy


Adams, Mrs Irene (Paisley N)
Corston, Ms Jean


Ainsworth, Robert (Cov'try NE)
Cotter, Brian


Alexander, Douglas
Cousins, Jim


Allan, Richard
Cox, Tom


Allen, Graham
Crausby, David


Anderson, Donald (Swansea E)
Cryer, John (Hornchurch)


Anderson, Janet (Rossendale)
Cummings, John


Ashton, Joe
Dalyell, Tam


Atherton, Ms Candy
Darvill, Keith


Austin, John
Davey, Valerie (Bristol W)


Baker, Norman
Davies, Rt Hon Denzil (Llanelli)


Banks, Tony
Davies, Geraint (Croydon C)


Barnes, Harry
Denham, John


Bayley, Hugh
Dismore, Andrew


Beard, Nigel
Dobbin, Jim


Bell, Martin (Tatton)
Dowd, Jim


Bennett, Andrew F
Eagle, Angela (Wallasey)


Benton, Joe
Edwards, Huw


Bermingham, Gerald
Efford, Clive


Berry, Roger
Ennis, Jeff


Betts, Clive
Etherington, Bill


Blackman, Liz
Fisher, Mark


Blizzard, Bob
Fitzpatrick, Jim


Boateng, Paul
Fitzsimons, Lorna


Bradley, Keith (Withington)
Flint, Caroline


Bradshaw, Ben
Follett, Barbara


Brake, Tom
Foster, Rt Hon Derek


Brinton, Mrs Helen
Foster, Don (Bath)


Brown, Rt Hon Nick (Newcastle E)
Foster, Michael Jabez (Hastings)


Browne, Desmond
Foster, Michael J (Worcester)


Buck, Ms Karen
Galloway, George


Burden, Richard
Gapes, Mike


Burgon, Colin
George, Bruce (Walsall S)


Butler, Mrs Christine
Gerrard, Neil


Cable, Dr Vincent
Gibson, Dr Ian


Caborn, Richard
Gilroy, Mrs Linda


Campbell, Mrs Anne (C'bridge)
Goggins, Paul


Campbell, Menzies (NE Fife)
Golding, Mrs Llin


Campbell, Ronnie (Blyth V)
Gordon, Mrs Eileen


Canavan, Dennis
Grant, Bernie


Cann, Jamie
Griffiths, Jane (Reading E)


Caplin, Ivor
Gunnell, John


Caton, Martin
Hain, Peter


Cawsey, Ian
Hall, Mike (Weaver Vale)


Chapman, Ben (Wirral S)
Hall, Patrick (Bedford)


Chaytor, David
Hamilton, Fabian (Leeds NE)


Chidgey, David
Hanson, David


Clapham, Michael
Harris, Dr Evan


Clark, Dr Lynda (Edinburgh Pentlands)
Healey, John



Heath, David (Somerton & Frome)


Clark, Paul (Gillingham)
Henderson, Doug (Newcastle N)


Clarke, Rt Hon Tom (Coatbridge)
Henderson, Ivan (Harwich)


Clarke, Tony (Northampton S)
Heppell, John


Clelland, David
Hesford, Stephen


Clwyd, Ann
Hill, Keith


Coaker, Vermon
Hinchliffe, David


Coffey, Ms Ann
Hodge, Ms Margaret


Cohen, Harry
Hoon, Geoffrey


Coleman, Iain
Hope, Phil


Colman, Tony
Hopkins, Kelvin





Howarth, Alan (Newport E)
Murphy, Paul (Torfaen)


Howarth, George (Knowsley N)
Naysmith, Dr Doug


Howells, Dr Kim
Oaten, Mark


Hoyle, Lindsay
O'Brien, Bill (Normanton)


Hughes, Kevin (Doncaster N)
O'Brien, Mike (N Warks)


Hurst, Alan
O'Hara, Eddie


Hutton, John
Olner, Bill


Iddon, Dr Brian
Öpik, Lembit


Illsley, Eric
Palmer, Dr Nick


Ingram, Adam
Pendry, Tom


Jackson, Ms Glenda (Hampstead)
Perham, Ms Linda


Jackson, Helen (Hillsborough)
Pickthall, Colin


Jenkins, Brian
Pike, Peter L


Johnson, Alan (Hull W & Hessle)
Plaskitt, James


Johnson, Miss Melanie (Welwyn Hatfield)
Pond, Chris



Pope, Greg


Jones, Barry (Alyn & Deeside)
Powell, Sir Raymond


Jones, Helen (Warrington N)
Prentice, Gordon (Pendle)


Jones, Dr Lynne (Selly Oak)
Prosser, Gwyn


Jones, Martyn (Clwyd S)
Purchase, Ken


Jowell, Ms Tessa
Quinn, Lawrie


Kaufman, Rt Hon Gerald
Radice, Giles


Keeble, Ms Sally
Rammell, Bill


Keen, Alan (Feltham & Heston)
Rapson, Syd


Keen, Ann (Brentford & Isleworth)
Raynsford, Nick


Kelly, Ms Ruth
Reed, Andrew (Loughborough)


Kennedy, Charles (Ross Skye)
Roche, Mrs Barbara


Kennedy, Jane (Wavertree)
Rooker, Jeff


Khabra, Piara S
Rowlands, Ted


Kilfoyle, Peter
Ruane, Chris


King, Andy (Rugby & Kenilworth)
Ruddock, Ms Joan


Kumar, Dr Ashok
Russell, Bob (Colchester)


Ladyman, Dr Stephen
Russell, Ms Christine (Chester)


Lawrence, Ms Jackie
Salter, Martin


Laxton, Bob
Sawford, Phil


Lepper, David
Sedgemore, Brian


Leslie, Christopher
Sheerman, Barry


Levitt, Tom
Sheldon, Rt Hon Robert


Liddell, Mrs Helen
Short, Rt Hon Clare


Linton, Martin
Skinner, Dennis


Lloyd, Tony (Manchester C)
Smith, Rt Hon Andrew (Oxford E)


Lock, David
Smith, Angela (Basildon)


Love, Andrew
Smith, Jacqui (Redditch)


McAvoy, Thomas
Smith, John (Glamorgan)


McCabe, Steve
Smith, Llew (Blaenau Gwent)


McCafferty, Ms Chris
Soley, Clive


McCartney, Ian (Makerfield)
Southworth, Ms Helen


McFall, John
Spellar, John


McGrady, Eddie
Squire, Ms Rachel


McIsaac, Shona
Stinchcombe, Paul


McKenna, Mrs Rosemary
Stoate, Dr Howard


Mackinlay, Andrew
Stringer, Graham


McNulty, Tony
Stuart, Ms Gisela


MacShane, Denis
Stunell, Andrew


Mactaggart, Fiona
Taylor, Rt Hon Mrs Ann (Dewsbury)


McWilliam, John



Mallaber, Judy
Taylor, Ms Dari (Stockton S)


Marek, Dr John
Taylor, David (NW Leics)


Marsden, Gordon (Blackpool S)
Thomas, Gareth R (Harrow W)


Marsden, Paul (Shrewsbury)
Tipping, Paddy


Marshall, David (Shettleston)
Todd, Mark


Marshall, Jim (Leicester S)
Tonge, Dr Jenny


Marshall-Andrews, Robert
Touhig, Don


Martlew, Eric
Trickett, Jon


Meacher, Rt Hon Michael
Truswell, Paul


Meale, Alan
Turner, Dr Desmond (Kemptown)


Michael, Alun
Turner, Dr George (NW Norfolk)


Milburn, Alan
Twigg, Stephen (Enfield)


Miller, Andrew
Tyler, Paul


Moffatt, Laura
Vaz, Keith


Moran, Ms Margaret
Vis, Dr Rudi


Morris, Ms Estelle (B'ham Yardley)
Wallace, James


Mowlam, Rt Hon Marjorie
Wareing, Robert N


Mudie, George
Watts, David


Mullin, Chris
Welsh, Andrew


Murphy, Denis (Wansbeck)
Whitehead, Dr Alan






Wicks, Malcolm
Woolas, Phil


Williams, Rt Hon Alan (Swansea W)
Worthington, Tony



Wright, Anthony D (Gt Yarmouth)


Williams, Alan W (E Carmarthen)
Wright, Dr Tony (Cannock)


Willis, Phil
Wyatt, Derek


Wills, Michael



Winnick, David
Tellers for the Noes:


Winterton, Ms Rosie (Doncaster C)
Mr. David Jamieson and


Wood, Mike
Ms Bridget Prentice.

Question accordingly negatived.

Mr. Streeter: I beg to move amendment No. 5, in page 1, line 13, after '9', insert
`(except Article 2 paragraph 40)'.

The First Deputy Chairman: With this, it will be convenient to discuss the following amendments: No. 6, in page 1, line 13, at end insert
`(except Article 2 paragraph 41)'.

No. 24, in page 1, line 13, at end insert
`other than in Article 2, paragraph 5)'.

No. 52, in page 1, line 13, at end insert
`other than in Article 2, paragraph 39)'.

No. 53, in page 1, line 13, at end insert
`other than in Article 2, paragraph 40)'.

No. 54, in page 1, line 13, at end insert
'other than in Article 2, paragraph 41)'.

No. 55, in page 1, line 13, at end insert
'other than in Article 2, paragraph 42)'.

No. 56, in page 1, line 13, at end insert
`other than in Article 2, paragraph 43)'.

New clause 17—Preparations for enlargement of the European Union—
`.—Pursuant to the Protocol on the Institutions with the Prospect of Enlargement of the European Union annexed to the Treaty of Amsterdam, stipulating a conference of the Member States in order to carry out a comprehensive review of the provisions of the Treaties on the composition and functioning of the institutions, Her Majesty's Government shall—

(a) publish and lay before both Houses of Parliament a statement regarding the reform of the composition and functioning of the institutions, no later than one month prior to the commencement of the conference, and
(b) not agree to such reform until a draft of the agreement has been lain before both Houses of Parliament, and approved by resolution of the House of Commons and noted by the House of Lords.'.

Mr. Streeter: Of all the changes agreed by the Government in Amsterdam, those set out in article 2, paragraphs 40 and 41 carry the most long-term significance. That may be why the Government have sought to curtail debate on those paragraphs. Nowhere in the treaty is Labour's negotiating failure at Amsterdam more clear; nowhere in the treaty is the great new Labour give-away more apparent than in the reforms to the appointment of the President of the Commission and new Commissioners from member states.
Being composed of experts, the Committee will understand that, under the current arrangements, the President is appointed by common accord by member states after consulting the European Parliament, so the

power to appoint the President currently lies, quite properly, with member states. The Committee will be aware that, under Maastricht, the nomination must be unanimously agreed by the member states. That is an important power. We all recall one famous occasion when unanimity could not be reached because the Conservative Government were not afraid to stand alone in Europe to defend the national interest.
Under Maastricht, each member state has an unfettered right to put forward its own nominee to become a Commissioner, although there is a duty to consult the President of the Commission. That, however, is simply consultation. Member states are free to ignore the President's views if they choose, which means that they can, in practice, appoint whom they want. That has been the position since the treaty of Rome. Every time a Conservative Government renegotiated the European treaties, we successfully defended the arrangement, but new Labour failed at its first attempt.
All that will be changed: those important national powers were given away at Amsterdam. Under article 2, paragraphs 40 and 41, it is now proposed, first, that the European Parliament should have a veto over the agreed nominee for President of the Commission. In other words, the person whom all the member states want can be blocked by the European Parliament. That clearly takes away an important power from member states and gives it to the European Parliament. Secondly, it is proposed that the President should have a veto over the nominee for Commissioner of each member state. Thus, if the United Kingdom, France or any other member state wants a particular person as its Commissioner, the President of the Commission can say no.
I detect that Labour Members are beginning to feel uncomfortable at that news, perhaps in disbelief that their Government have agreed to such a proposal. I am saddened to tell them that it gets worse still. Article 2, paragraph 41, says:
The Commission shall work under the political guidance of its President".
The "political guidance of the President" is an apparently innocuous phrase in what many people say is an innocuous treaty, but like so much at Amsterdam, just a moment's reflection reveals the true picture.
First, does the Minister think that it is in our national interest that no President of the Commission can be appointed unless the European Parliament agrees? The European Parliament can veto before breakfast, lunch or dinner until it gets the person it wants, and we can be sure that it wants a person who is unreservedly committed to its interventionist agenda. Secondly, does the Minister think that it is in our national interest that member states can no longer choose their own Commissioner?
Now that the President is to have a veto, can he not effectively pick the other 19 Commissioners? On what criteria will selection by the President be based? What assurances are there in the treaty that the Commissioners who take office in 2000 will not all be drawn from one political party, from one point of view, or that all members will not share a common federalist view? None whatever.
What assurances did the Minister seek on those issues? If he sought none, why not? If he did, why did he get none? The President can use his veto again and again to ensure the right result for himself and for the Commission,


but possibly the wrong result for Britain. Once the President of the Commission is appointed, the Commissioners must all work under his political guidance.
Whichever way we look at the matter, it clearly amounts to a fundamental shift in the nature of the Commission. We are entitled to ask what possible justification there could be for agreeing those proposals. What justification is there for removing our right to decide who we want as our British Commissioner? Why has the independence of Commissioners been removed? What mischief are the proposals designed to correct? What was wrong with the present arrangements? The people of Britain require answers.
The proposals are a significant step towards an overtly political Commission. They concentrate unprecedented powers in one individual's hands. In that sense, it is after all a typical new Labour solution, but it is bad for Britain and for Europe. Why did the Minister agree the proposals? Taken together with the extensions in qualified majority voting and the substantial additional powers for the European Parliament that we have already debated, the Minister must admit that the treaty he signed represents a significant shift from the nation state to the central institutions of the EU. What did he bring back in return? Absolutely nothing.
I am afraid that there is even worse to come. Article 160, left unchanged by Amsterdam, provides:
If any Member of the Commission no longer fulfils the conditions required for the performance of his duties…the Court of Justice may … compulsorily retire him.
That is worthy of careful reflection. Clearly, article 2, paragraph 41 imposes a new condition on each Commissioner—to work under the political guidance of his President. If he, in the President's opinion, fails to toe the presidential line or shows too much independence of thought, or if he questions the President's political direction or disagrees with it, the Commission can apply to the European Court of Justice to remove him. If the Commissioner has failed to follow the President's political guidance, the court will have little option, under the treaty, but to remove him.
In practice, those matters would not come to court, because the President would simply use all those powers to force a Commissioner's resignation. The significance of that is that the President has now acquired the power to hire and fire. That is a radical new departure. He now has the ability to gather around him political placemen and placewomen to do his bidding. If I am wrong in my interpretation of the treaty or my logic, I invite the Minister to intervene now and tell me. He does not do so.
The whole balance of power in Europe has therefore shifted still further away from nation states and towards the centre—away from intergovernmental control and towards a political Commission, led by a political President. From experience, we can have little doubt that the direction set by such a body will be an increasingly centralised and inward-looking Europe. Just when Europe needs to become more flexible and outward-looking to survive in an increasingly competitive world, the Government have agreed to proposals that have the opposite effect.
This is a major change, but it has been tucked away in the small print. It was not even mentioned by the Prime Minister in his statement to the House on 12 June 1997.
The Minister has a duty to tell us when he replies to this debate why he agreed to those proposals and to confirm that he has fully considered the implications for Britain and found them to be in the national interest.
This group of amendments also raises the issue of flexibility. We welcome the inclusion of that concept in the treaty. Not for the first time, the whole of Europe agrees with a reform suggested by the Conservatives, often in the teeth of fierce opposition. We have always advocated the concept of a flexible Europe. Flexibility is essential if the European Union is to be enlarged successfully. A wider Europe makes the case for a flexible Europe more compelling. We cannot force a diverse, enlarged Europe of 25 member states into a rigid straitjacket of uniformity.
We believe that flexibility must be carefully introduced following certain key principles, the most important of which is that any arrangement that allows groups of fewer than 15 member states to use Community institutions must be agreed by all. Sadly, the Amsterdam treaty does not grasp the essential point that any future projects must be agreed by all member states.
Under the treaty, a group of member states can decide to go ahead with further integration in any area without the support of the full European Union. New article 5a provides that only those member states that want to take part in a new activity have any part in that decision. It is obvious that a new activity operated by just a few states could have significant implications for all member states, and should be sanctioned by all before it begins.
There is provision for a veto similar to the so-called Luxembourg and Ioannina compromises. Does the Minister accept that, for the first time, that provision appears in the text of the treaty and not as a Council declaration? We would have dealt with the matter as a declaration, to ensure that the Council of Ministers alone and acting unanimously had the power to interpret the use of the veto.
Having agreed to incorporate the form of words into the treaty for the first time, does the Minister not realise that he has opened the door to rulings from the European Court of Justice on the veto, and has given the court the power to overrule the use of that veto? I look forward to his response on that point.

Mr. Cash: Does my hon. Friend accept that, as the Commission said, the arrangements under the Maastricht treaty for allowing other member states to go ahead with proposals for economic and monetary union amounted to the best form of flexibility yet devised? Does he agree that we should reflect on that, and do something about it?

Mr. Streeter: My hon. Friend makes an interesting point. The difference is that economic and monetary union is within the exclusive competence of the European Union, whereas these provisions allow some member states to go beyond that.
There are real concerns about the additional powers that are being given to the European Parliament and to the President of the Commission under paragraphs 40 and 41 of article 2. It is now clear beyond doubt that, in a number of vital areas, the Government failed the nation


at Amsterdam. I invite the Minister to answer all my questions, and to explain how on earth these changes could possibly be in the national interest.

Mr. Cash: The issue I just raised goes to the heart of the amendments on flexibility. I secured an Adjournment debate on this matter about 18 months ago, so, having put my arguments against flexibility on that occasion, I do not need to delay the Committee now.
My remarks are directed at the Government, as they have responsibility for the conduct of the treaty. What worries me is that flexibility—or variable geometry, as it is sometimes called—is a cop-out. The object of the exercise is to allow a legal framework to be created, so that institutional arrangements can be put in place for the Community as a whole as part of a legal instrument enforceable by the Court of Justice.
Within that, with what I often refer to as weasel words, we can go for an opt-out or an opt-in, the object of which is to allow the other member states to go ahead on the assumption that, sooner or later, through pressure or after the passage of time, and faced with the problem of whether we remain outside the institutional procedures that have been created, we would have to catch up and join in.
One point regarding the protocol and third stage of monetary union is not often appreciated. Although we had the right to opt out in the first place, under the protocol we have the right to opt in later on, as we have with other matters, such as immigration and visas.
6.45 pm
A common legal area and a new process are being created. It is not, as the Minister said, a matter of international agreements. I am astonished at the Minister's ignorance: he could not possibly justify such a statement—which he made twice in his speech on the previous amendment.
A legal framework is being created: it has not been fully consummated yet. It is not merely partly on the way—it is substantially on the way: in many respects, it is already in place. The Minister knows that. Flexibility enables that process to continue, while pretending that the opt-out represents a reservation over the process. Theoretically, that is so, but in practice it is not a sustainable argument, and that is the problem.
During the debate on the confidence motion on the Maastricht treaty, I made the point to our previous Prime Minister that, sooner or later, under the process that includes flexibility as it is now interpreted, we will have to renegotiate the treaties, go along with everything contained in them or get out altogether. That is a serious but avoidable problem.
I agree with hon. Members who said in the previous debate that the process of flexibility is being allowed to go ahead, and no real restraint is being imposed on it. There are reservations and doubts, or so we are told, but in practice the whole thing is being allowed to go ahead.
I invite the Government to consider the enormity of the problem. This process of salami slicing is going on the entire time. However, we are moving beyond thin slices to enormous chunks of our sovereignty being taken away from us, or being pooled with those of other countries and

put into a legal framework, which will create impossible difficulties for us in the future. That is why I am so resistant to the concept of flexibility.
I agree with my hon. Friend the Member for South-West Devon (Mr. Streeter) on institutional changes. It is an outrage that the Commission will be given these powers, and that the President will, in effect, have the role of a political commissar, which is what it boils down to, because he will be accountable to no one. That is the worst concession made during the negotiations, because it is the ultimate concession. The process is undemocratic.
Furthermore, under the common foreign and security policy, the high representative—I think that the deputy Secretary-General will be given that role—will be able to conduct foreign policy on the basis of so-called co-operation and on his own initiative. We should reflect on what happened in Bosnia, because that was a total and unmitigated disaster.
In fact, the arrangement does not work. As I recall, Lord Owen—who was in the area for a long period, and was at the rock face when everything was going on—witnessed the absurdity of the attempts to enable the European Union to co-ordinate foreign policy through a high representative. As I have said, the whole business was an unmitigated disaster. The Americans and NATO had to come in to save the day.
As I said earlier, my accusation is that the amendments represent a complete cop-out. We are kidding ourselves if we think for one minute that the arrangements in the amendments, and in the treaty, can possibly be justified. They are thoroughly undemocratic. They will not work. They will bring the whole European Union into a state of chaos within years. Otherwise, as is intended—the Minister knows this perfectly well—we shall end up with what I described earlier: the eventual creation of a country called Europe, for which these provisions are ultimately designed.

Mr. David Heath: I wish to speak to new clause 17, which I tabled along with my hon. and learned Friend the Member for North-East Fife (Mr. Campbell). First, however, let me say something about the amendments tabled with it.
I listened carefully—as I always do—to the case made by the hon. Member for South-West Devon (Mr. Streeter), who spoke to his amendments Nos. 5 and 6. I still believe that he sees the Commissioners as delegates from national Governments. I prefer to see them as functionaries of the Council and the European Union—as, in effect, civil servants, working within the confines of settled policy and settled decisions; instigating policy, of course, but instigating policy for decisions by elected Members.
I find it extraordinary that the view can be taken that a Commissioner can be mad, bad, incompetent or worse, and still cannot be removed on the recommendation of the President of the Commission, if the member state that sent the Commissioner there happens to believe that that person is acting in the interests of one nation. That, surely, is an abuse of the democratic process, rather than an underlining of its strength.
I also listened carefully to the hon. Gentleman's explanation of his support for moves towards greater flexibility—the so-called variable geometry, a concept that the Conservative party rightly instigated and followed


through. The hon. Gentleman seemed to be trying to find reasons why he could not accept and, indeed, applaud a recommendation promoted by a previous British Government—a previous Conservative Government—which was now finding its way into a treaty obligation. His arguments struck me as spurious rather than founded in common sense.
As the hon. Member for Stone (Mr. Cash) said, the amendments deal with the high representative—who is the Secretary-General of the Council, was appointed following a unanimous decision of the Council, and can act only within the compass of policies decided unanimously by the Council. In the amendments to which he did not speak, the hon. Gentleman argues against moves that increase the transparency of the Council. Our only criticism is that such moves do not go far enough: they are going in the right direction. I am not persuaded by those arguments, and would not support them if they were pressed to a vote.
New clause 17 addresses one of the key omissions from the Amsterdam process and the treaty. The process did not address the institutional changes that are required for enlargement; it skirted around the problem, rather than meeting it head on. The wording of the treaty almost constitutes an admission of failure. We know that the protocol is there, and it must be returned to in a conference of member states. The new clause seeks to ensure that the British Government are clear about their intentions in regard to such negotiations.
Of course, we do not intend to bind British Ministers in advance of negotiation. That would be foolish. We note, however, that the last Government were able to indicate the main heads of negotiation that they would pursue at the intergovernmental conference. We believe that it would be common sense and good practice for the new Government to take the same view. The special conference will have to tackle four key questions, some of which were mentioned earlier in the debate.
When the first wave of enlargement takes place, the big member states will lose their second Commissioners: that is inevitable. How will the process be managed, and what will be the compensatory mechanism to ensure that those states retain influence in decision making? Let us look further ahead, to even more enlargement of the Union. What will happen to the Commission then? What will happen if, at some stage in the future, we have a European Union with 25 members? Will each have an individual Commissioner, and what jobs will those Commissioners do?
The structure will become unwieldy and top-heavy. It is clearly sensible to establish some form of agreement at this stage about how such a development may take place, so that we do not have to keep coming back to conferences on institutional change. How will the votes in Council be re-weighted to reflect the new balance of members and the loss of the second Commissioners? We have heard indications from the Government that they have discussed that, but there has been no firm resolution in regard to the direction in which they are moving.
The European Parliament currently has 626 Members and a cap of 700. If all the applicant countries gain admission to the European Union, who will lose seats—proportionally, in terms of the population—to maintain

the cap at 700? That question has not yet been dealt with, but there is clearly a de minimis requirement for some of the smaller states, if they are represented at all, to be over-represented in the European Parliament, just as some smaller communities are over-represented in the House of Commons in order to be represented in any meaningful way. We must find a mechanism for divesting some of the larger states of some of their European Parliament membership. That is not an easy process: it is not one in which we can engage without careful thought about the consequences.
New clause 17 provides a mechanism enabling the British Government to make plain their negotiating objectives and their view on these important issues. It also provides an incentive to ensure that the new member conference will take place at an early stage, and with a sensible agenda that the British Government will effect through their presidency over the next six months. I hope that the Minister will be able to assure me that the issues are being considered carefully, that there is an agenda that he can share with the House and that he will, in due course, make the British Government's position plain.

Mr. Oliver Letwin: I should like to restrict myself to what I believe the Minister will refer to as a narrow discussion of what he will probably call a narrow point. The Minister's view is, presumably, that a murderer armed with a stiletto is engaged merely in a narrow action of piercing the heart.
I shall restrict myself to amendment No. 6, which deals with article 2, paragraph 41, which in turn relates to what used to be called article 163 and is now article 219, which my hon. Friend the Member for South-West Devon (Mr. Streeter) has not only alluded to, but admirably exposed. I should like to take his discussion a little further.
A new Member of the House often feels impatient when others are called ahead of him. When you, Mr. Lord, called the hon. Member for Somerton and Frome (Mr. Heath), I felt impatient, but your wisdom was demonstrated because from the hon. Gentleman's speech I learnt the necessity of making my own.

Mr. MacShane: Come to the point.

Mr. Letwin: I am coming very much to the point.
The hon. Member for Somerton and Frome made the Committee believe that he preferred to see the Commission as functionaries. The Commission, which is dealt with in article 219, is described in article 211, which has existed since the treaty of Rome, and is given four functions, the third of which is that it should have its own power of decision. There has never been a body of civil servants on the face of the earth who have been given their own power of decision; nor have they been asked to deliver opinions or initiate legislation. The Commission has not been, was not conceived as and is not intended to be a mere civil service. On the contrary, it is one of the fundamental pillars of the European Union; its nature and how it conducts its affairs are critical to the development of the European Community and the European Union as a whole. [Interruption.] I am surprised that Labour Members are reacting to that as if it were a controversial statement; I am quoting almost verbatim from Monet, who made that point very clearly in his original propositions.
The amendment deals with the article in which the treaty gives the President the right to guide politically the actions of the Commission. What does that mean? I took the trouble to investigate the texts in the other languages, to check whether the English was giving us a false impression, and I found that it does a little. The other languages make it clear that "policy leadership"—the most accurate translation of the German—or "policy orientation"—the most accurate translation of the French—is being given.
The article introduced by the treaty is saying that the President of the Commission is to give directions about the policy to be undertaken by the Commissioners. To return to the observations of the hon. Member for Somerton and Frome, it is odd for a group of people who are, in his view, extensively civil servants, to have a policy orientation or to be driven in a particular policy direction. What is the article building up to? What is the intention of giving the President policy direction over the Commission?
7 pm
In order to understand that question, we must refer not to Monet or Schumann, but to Spinelli, who spent much time thinking seriously about this issue. Were the hon. Member for North Durham (Mr. Radice) present, his long disquisitions on the views of Spinelli would drive him to the same conclusions as I have reached. In 1972, Spinelli said that
the Commission, the central driving force of the Community"—
not, as the hon. Member for Somerton and Frome said, a civil servant—
has been unable to play its full part
because of
the absence of a political image".
Spinelli continued:
successive Commissioners have only at rare moments been able to pursue a line of action resulting from a political choice".
It seems clear that the article is intended to remedy what Mr. Spinelli saw as that defect and to allow the Commission, not on rare occasions, but continuously, to pursue a line of action resulting from a political choice—in particular, the political choice of the President of the Commission.
Why should those framing the treaty desire to give the President the ability to drive forward the Commission and to make political choices on a continuous basis? Spinelli tells us; it is interesting that in 1972 he foresaw the article—that suggests that it did not arise by accident. Spinelli tells us that if that objective were to be achieved, the
President could devote himself entirely to the direction of the college, to political contacts, and to prospective political developments.
He also said that that was necessary
if the Commission is to take an effective part in the formation of a political Europe.
That is what underlies the article. The intention is to give the President of the Commission the ability to make the Commission a driving force towards the formation of a political Europe. I cannot see what that could conceivably mean, other than that the Commission is to be used by a President to drive towards the creation of a

nation state, a state that governs the politics of Europe. It is extremely difficult to put any other construction on the article, or its intentions.
We must take this a step further. It must be that if a President is chosen in the manner suggested in article 2, paragraph 40, to which my hon. Friend the Member for South-West Devon referred in the early part of his speech, that method of selection will be thought inadequate by the peoples of Europe once it becomes clear that the President is acting as a driving force, through the Commission, towards political ends. It is too undemocratic for the President to be selected merely by the member states.
What is the end of the process? We do not have to refer to Spinelli or the Government for an answer, as we have a higher authority. Mr. Delors made the agenda quite clear. The President having been given the power, the agenda is to speak of the democratic deficit and then to assert that it is necessary to elect the President directly. We have a clear stepping stone, a sort of scala mobile. As we move up the staircase, we shall discover ourselves being remorselessly drawn by the logic towards the direct election of a President in a way that exactly mirrors the position of the President of the United States, who gives political guidance to a Cabinet which he chooses and which he can cashier in order to further the interests of a nation state. That is where the article is taking us.
I do not think that this is an apocalyptic vision: it is based on the theories and doctrines exposed by the leading proponents of the European Union on the continent of Europe. If we in the House accept this part of the treaty, we are signing up to that process. I fear; I prophesy; I am wholly confident that some years from now when these things have happened, we in the House will be told that we accepted the logic because we accepted the article.
Assuming my Front-Bench team asks me to do so, I shall go into the Lobby tonight with more fervour than at any time since I entered the House and, possibly, with more fervour than at any time in the future.

Mr. John Hayes: I am delighted to follow my hon. Friend the Member for West Dorset (Mr. Letwin). He spoke of the necessity of speaking after hearing the contribution of the hon. Member for Somerton and Frome (Mr. Heath); given the alacrity of my hon. Friend's remarks, I follow him with some trepidation.
I wish to draw particular attention to the nature of the institutions with which the group of amendments deals. Those institutions lack democratic and political legitimacy. How do we test this assertion? First, do they enjoy popular support? Secondly, are they structures that deliver political accountability? Thirdly, are they rooted in coherent political traditions?
Democratic support for institutions must be founded, first, on a degree of comprehension and on some suggestion of empathy. To take a parochial example, parishes, local authorities and even this Parliament itself depend for their democratic legitimacy not only on an understanding of what they do, but also on a feeling of empathy with and sympathy for them as bodies. I suggest that the European institutions fail this test comprehen-sively; people neither understand nor care what they do. The problem was referred to earlier with particular respect to the turnout in European elections, but any measurement—polls, surveys or any other test of public opinion—suggests that my assertion is close to the truth.
Secondly, I suggest that the European institutions are unaccountable because of a mismatch between the exercise of political power and the expression of popular will. There is no better example of this than the Commission. It typifies the paradox because it is not an organisation of functionaries, as suggested by the hon. Member for Somerton and Frome, but it is an organisation that takes political decisions entirely detached from the exercise of popular will.
My hon. Friend the Member for West Dorset suggested that some democratic legitimacy might be considered to be offered to the Commission in terms of its relationship with and communications with the President. As my hon. Friend so accurately pointed out, however, the President himself currently lacks democratic legitimacy. My hon. Friend suggested that to give the President that necessary legitimacy—Labour Members might believe that my hon. Friend is being fanciful, but I believe that he is being pertinent—there will ultimately be a call for him to be directly elected. The European institutions, therefore, also fail the test of accountability.
The third test of legitimacy is that the European institutions must have some connection with the history of the nations that they represent. There must be a sense of evolutionary, democratic political development. The European institutions have no such connection to history; they are not part of an unbroken tradition. They are the creations of a blueprint; a dream; a big idea. They are not born of the pragmatism that the Minister recommended when he talked about the need for a flexible, forward-looking and imaginative view of international affairs—far from it.
The problem with the institutions is well illustrated by new clause 17, a point to which the hon. Member for Somerton and Frome drew attention. Paradoxically, the very flexibility and pragmatism that are necessary for enlargement run entirely contrary to the rigidity of institutions that jealously guard their existing power and vie for more power among themselves. This rigidity in Europe will make the imaginative, pragmatic view that the Minister recommended and to which the hon. Member for Somerton and Frome also referred impossible.
I assert that this treaty goes no way towards dealing with these fundamental problems. One could say that the problems are inherent in the European institutions, but one would have hoped that the treaty would at least have taken steps towards addressing the issues. The treaty fails by that measure, too.
Against that background, we heard the Minister comparing the European Union to an international treaty organisation. We must remember that the EU is a lawful political structure, which sees itself as being constitutionally valid and, in its most extreme form, as a sovereign political superstructure. How then can we compare the EU to the International Monetary Fund, to NATO or to any other international treaty organisation entered into freely by sovereign, independent nations? It is a farcical comparison, which is not worthy of a Minister. In fact, the comparison displays either a remarkable lack of understanding of the subject or an attempt to mislead not the Committee, because the

Committee is far too wise to be misled in such a way, but the British people. For all those reasons, I support the amendments.

Mr. Swayne: I shall be extremely brief because I have only one point to make. I wish to draw the Committee's attention to the way in which all the different elements in the treaty are of a piece. When we discussed the previous group of amendments, we saw how the right of co-decision given to an assembly makes it a Parliament. To be a real Parliament, a people must be found for that Parliament to represent.
In this group of amendments, we see exactly the same process in train. Powers are given to the President which, for the first time, make him politically responsible for the operation of his Commissioners—in effect, his Cabinet. By giving him political direction over them, we shall make him a President in the sense in which we ordinarily understand the word. The search must, therefore, be on for a state or country for him to be President of. That is the process by which all the different elements of this super-state are gradually falling into place.

Mr. Doug Henderson: I shall deal first with new clause 17. I have some sympathy with the views expressed, but I cannot accept the new clause because the requirements laid down in it would be too rigid and would not permit the British Government of the day sufficient scope for negotiating in any institutional matters that were before the European Union. On such matters, it is essential not only to know where one is going, but to know that there are a number of different avenues that could be followed to get there. It would be a little counter-productive to say too much about that in advance. In addition, unless there was already a relevant legislative provision, anything agreed under the scope of the new clause would require legislation, either primary or secondary, depending on the nature of the business.
As a general principle, we want to see an extension of scrutiny, and we have made our position clear on that. I made it clear when I appeared before the Select Committee on European Legislation that in principle it would be helpful to see further scrutiny of legislation under both the second and third pillars. My right hon. Friend the Leader of the House will shortly make an announcement on a wider range of issues. I hope that the hon. Member for Somerton and Frome (Mr. Heath) will accept my assurances on that point.
The other issues raised in the debate include the question of flexibility. The flexibility provisions were widely debated, as the Opposition will realise from their time in government, and the matter was discussed over many months in the IGC negotiations. I was personally involved in dealing with those aspects before the Amsterdam meeting, and they were again dealt with at Amsterdam. All along, the principle that I adopted in negotiation—I hope that the Opposition accept this principle as essential—was that flexibility might be required in some instances, but that it should not be used as an excuse for breaking up the single market. The integrity of the single market and moving forward in the single market are extremely important for a trading nation such as Britain. It is very much in our interests that that should be the case, and we do not want flexibility to undermine that.
We would also not want flexibility to be used as a method of making the circumstances that pertained in countries that wished to accede to the European Union different from the circumstances that pertained in countries that were existing members. If it is necessary for there to be a period of transition, the transitional arrangements should be quite separate from any general flexibility provisions and should be dealt with as part of the negotiations for the accession of those countries.
I do not believe that flexibility should be used widely. In the original IGC talks, there was a long list of circumstances in which flexibility could not be used, and it was subsequently agreed to outline in principle the circumstances in which it could be used. Those uses are limited, and I do not think that flexibility will be used greatly in the near future.
I should remind the Committee of the safeguards built in by the Government in the IGC negotiations. I do not know, but I presume that the previous Government might have wanted to win some of the same safeguards.
The first safeguard is that any flexibility must involve a majority of member states. Secondly, it can be used only as a last resort measure. Thirdly, non-participants' interests are fully protected. Fourthly, flexibility must be open to all who subsequently wish to join. Fifthly, flexible actions will be transparent. Sixthly, non-participants in a flexible action may attend and take part in discussions. Seventhly, flexibility must not distort competition or restrict trade, discriminate between nationals of member states or affect existing Community policies.
Eighthly, and critically, although flexibility proposals can be agreed by majority voting, the Government ensured in the Amsterdam negotiations that the clauses will be subject to the emergency brake—the veto mechanism—that allows any member state that opposes a specific flexibility proposal to veto it by bringing it back to the Council.
Those safeguards deal with tightly defined circumstances, and they therefore have my full support as part of the treaty package. I hope that the Committee will accept that and reject the amendments that would undermine those safeguards.

Mr. Cash: Does the Minister accept that although the consequences of the concept of flexibility will be to allow the process to move forward as a legal framework, by accepting those who do not wish to join with the others on certain functions, the net result of the process will be to advance the integration process, which—as with economic and monetary union, as the European Commission has stated—has always been the intention?

Mr. Henderson: I should hope that everything in the treaty is movement forwards—from Europe's previous political and economic circumstances, to anticipating the circumstances that we may face in the future. Flexibility will undoubtedly be part of integration in some circumstances. The single market is part of the concept of integration, and it is very much in the United Kingdom's interests, which is why the Government support it.

Mr. Streeter: Before the Minister leaves the issue of flexibility, will he confirm that the point I made about the

European Court of Justice having the final say in interpreting whether a member state has validly exercised the emergency brake or veto procedure is correct?

Mr. Henderson: The European Court of Justice will have authority to intervene, should it be asked to do so, to ensure that the rules on the flexibility clause have been properly applied. That will be its remit, and it is a very sensible involvement of the court. If the Union does not follow those rules for some reason and if the safeguards have not been guaranteed, the court will be able to judge the matter.
The second issue dealt with by this group of amendments is the structure of the office of the President and of the Commissioners. It has been said, especially by Conservative Back Benchers, that this is the thin end of a wedge, which will lead to the direct election of the President, who will be the executive and President of the European Union state, under whom the Commissioners will act as his Cabinet. Those concerns reflect an unreal world.
Opposition Front Benchers, who were in government, will know how the European Union works, will be aware of the Commission's role in relation to the Council of Ministers and will realise the resolve of nations other than the United Kingdom to ensure that sovereignty is retained except when we agree to pool it, to influence decisions. They will know also that, on crucial decisions, unanimity is required, and that the Commission cannot force through any proposal regardless of the views of the Council or a nation that is a Council member.
The changes are very much in Britain's interests. They are about the nations of the European Union agreeing on who will be the President, and about the European Parliament also giving its approval. Those requirements can be justified on the ground of democracy. Nevertheless, I am a practical person, and I cannot foresee a situation in which the European Parliament would reject someone as President if the Council had agreed on who he or she should be. It is not a realistic scenario.
The European Parliament will, of course, want to express its view on who is President. However, as Members of the European Parliament come from the same countries and political parties as Council members, I do not think that their views will be very much out of line with the majority Council view. The fear is therefore unrealistic.
Currently, states nominate a Commissioner, who then takes his or her post. Although it has not happened in the eight or nine months that the Government have been involved in the process, and although it does not happen with British Commissioners—who have been very co-operative and helpful, backed the President and seriously undertaken their responsibilities to the Commission and to the Union—some Commissioners do not always take the Commission or European Union view and grind their own axe. Some Commissioners have a view of their own and go off on their own track, regardless of what might be the Commission or the Council policy.
The changes are intended to minimise those risks, so that those who are appointed as Commissioners will work with the President in undertaking the Commission's


responsibilities. The clause will do nothing more than that. It is necessary to modernise and to give the Commission greater impact and effectiveness.

Mr. Hayes: I should like to draw out from the Minister the implications of his comments. He said that some Commissioners grind their own axe, by which he presumably meant that they stand up for their own national interests. Therefore, is he not really saying that the changes minimise opportunities to defend national interests within the institutions and deliver a more communautaire perspective of Europe, which will lead to the type of contradiction that I tried to describe in my earlier comments?

Mr. Henderson: The hon. Gentleman has returned to political theorising, because he has not described how the Commission works. When Commissioners express idiosyncratic views, the views tend to deal more with party politics than with nation states. The changes are to combat a Commissioner pursuing his or her own track, rather than following the consensus agreed after all the arguments. The changes will not guarantee that that will happen, but they will encourage the Commission to work as a body and give it greater unity and effectiveness.
I recommend that the Committee should reject this group of amendments.

Mr. Streeter: I am grateful to the Minister for responding to the debate. I am sure that he read the Amsterdam treaty before he signed it—I certainly do not suggest that he did not—and that he understood the words in it. As I listen to his responses to our debates, however, I increasingly believe that he has not thought through the long-term implications of what he has signed. While the Government are undertaking constitutional reform on domestic issues without considering the long-term implications of unstitching our Union, the Minister has agreed matters at Amsterdam without considering their long-term implications.
The Opposition understand that, ultimately, it is for member states to decide by unanimity the big issues in Europe, but we would be blind if we did not realise that the Commission drives the European Union forward and sets the agenda. The Commission is very much more than the civil service described by the hon. Member for Somerton and Frome (Mr. Heath)—who will be delighted not to have to correct my pronunciation of his constituency.
I should like to make two points, because the Minister's reply to the debate was again unsatisfactory. If, as he says, the European parliamentary veto over the appointment of a President could never be used—he said that it was inconceivable that the Parliament would set aside the unanimous view of member states—why on earth was it written into the treaty? Why are the words in the treaty if they will never be used? Of course they could be used and there are no safeguards against their being used promiscuously.
Secondly, it is an alarming development that the President of the Commission can gather around himself political placemen and placewomen to set off on a frolic of their own. The Minister has failed to give me the assurances that I was seeking.

Mr. Doug Henderson: The hon. Gentleman should understand that before the President can agree to a Commissioner, that Commissioner has to be nominated by a nation state.

Mr. Streeter: I am grateful to the Minister for making that point, but it does not address the point that a nation state can nominate a Commissioner, but the President can reject him. The President has an unlimited veto.
I appreciate that we are now coming up against the limit imposed on us by the cruel guillotine that is clearly stifling debate on an important group of amendments. We do not find the Minister's answers satisfactory. We believe that he has not thought through the long-term implications of what he has signed, and we intend to press the amendment to a Division.

Question put, That the amendment be made:—

The Committee divided: Ayes 132, Noes 260.

Division No. 130]
[7.30 pm


AYES


Ainsworth, Peter (E Surrey)
Gibb, Nick


Amess, David
Gill, Christopher


Ancram, Rt Hon Michael
Gillan, Mrs Cheryl


Arbuthnot, James
Goodlad, Rt Hon Sir Alastair


Atkinson, Peter (Hexham)
Gorman, Mrs Teresa


Baldry, Tony
Gray, James


Bercow, John
Green, Damian


Blunt, Crispin
Greenway, John


Body, Sir Richard
Grieve, Dominic


Boswell, Tim
Hague, Rt Hon William


Bottomley, Peter (Worthing W)
Hamilton, Rt Hon Sir Archie


Bottomley, Rt Hon Mrs Virginia
Hammond, Philip


Brady, Graham
Hawkins, Nick


Brazier, Julian
Hayes, John


Brooke, Rt Hon Peter
Heald, Oliver


Browning, Mrs Angela
Heathcoat-Amory, Rt Hon David


Bruce, Ian (S Dorset)
Horam, John


Burns, Simon
Howard, Rt Hon Michael


Butterfill, John
Howarth, Gerald (Aldershot)


Cash, William
Hunter, Andrew


Chapman, Sir Sydney (Chipping Barnet)
Jackson, Robert (Wantage)



Johnson Smith, Rt Hon Sir Geoffrey


Chope, Christopher



Clappison, James
Key, Robert


Clark, Rt Hon Alan (Kensington)
King, Rt Hon Tom (Bridgwater)


Clark, Dr Michael (Rayleigh)
Kirkbride, Miss Julie


Clifton—Brown, Geoffrey
Laing, Mrs Eleanor


Collins, Tim
Lait, Mrs Jacqui


Cran, James
Lansley, Andrew


Davis, Rt Hon David (Haltemprice)
Leigh, Edward


Dorrell, Rt Hon Stephen
Letwin, Oliver


Duncan, Alan
Lewis, Dr Julian (New Forest E)


Duncan Smith, Iain
Lidington, David


Evans, Nigel
Lloyd, Rt Hon Sir Peter (Fareham)


Faber, David
Loughton, Tim


Fabricant, Michael
Luff, Peter


Fallon, Michael
MacGregor, Rt Hon John


Forth, Rt Hon Eric
McIntosh, Miss Anne


Fowler, Rt Hon Sir Norman
MacKay, Andrew


Fox, Dr Liam
Maclean, Rt Hon David


Fraser, Christopher
McLoughlin, Patrick


Gale, Roger
Madel, Sir David


Garnier, Edward
Malins, Humfrey






Maples, John
Stanley, Rt Hon Sir John


Mawhinney, Rt Hon Sir Brian
Streeter, Gary


May, Mrs Theresa
Swayne, Desmond


Moss, Malcolm
Syms, Robert


Nicholls, Patrick
Tapsell, Sir Peter


Norman, Archie
Taylor, Rt Hon John D (Strangford)


Ottaway, Richard
Taylor, Jonn M (Solihull)


Page, Richard
Tredinnick, David


Paice, James
Trend, Michael


Paterson, Owen
Tyrie, Andrew


Pickles, Eric
Viggers, Peter


Prior, David
Walter, Robert


Randall, John
Wardle, Charles


Redwood, Rt Hon John
Wells, Bowen



Whittingdale, John


Robertson, Laurence (Twk"b'ry)
Widdecombe, Rt Hon Miss Ann


Roe, Mrs Marion (Broxbourne)
Wilkinson, John


Rowe, Andrew (Faversham)
Wilshire, David


Ruffley, David
Winterton, Mrs Ann (Congleton)


St Aubyn, Nick
Winterton, Nicholas (Macclesfield)


Sayeed, Jonathan
Woodward, Shaun


Shephard, Rt Hon Mrs Gillian
Young, Rt Hon Sir George


Shepherd, Richard



Simpson, Keith (Mid-Norfolk)
Tellers for the Ayes:


Spicer, Sir Michael
Mr. Stephen Day and


Spring, Richard
Mr. Nigel Waterson.




NOES


Abbott, Ms Diane
Cohen, Harry


Ainsworth, Robert (Cov"try NE)
Coleman, Iain


Allan, Richard
Colman, Tony


Allen, Graham
Corbyn, Jeremy


Anderson, Donald (Swansea E)
Corston, Ms Jean


Anderson, Janet (Rossendale)
Cotter, Brian


Ashton, Joe
Cousins, Jim


Atherton, Ms Candy
Cox, Tom


Austin, John
Crausby, David


Baker, Norman
Cryer, John (Hornchurch)


Banks, Tony
Dalyell, Tam


Barnes, Harry
Darvill, Keith


Bayley, Hugh
Davey, Edward (Kingston)


Beard, Nigel
Davey, Valerie (Bristol W)


Bell, Martin (Tatton)
Davies, Rt Hon Denzil (Llanelli)


Bennett, Andrew F
Davies, Geraint (Croydon C)


Benton, Joe
Dismore, Andrew


Bermingham, Gerald
Dowd, Jim


Berry, Roger
Eagle, Angela (Wallasey)


Betts, Clive
Edwards, Huw


Blackman, Liz
Efford, Clive


Blizzard, Bob
Etherington, Bill


Bradley, Keith (Withington)
Ewing, Mrs Margaret


Bradshaw, Ben
Fisher, Mark


Brake, Tom
Fitzpatrick, Jim


Brinton, Mrs Helen
Follett, Barbara


Brown, Rt Hon Nick (Newcastle E)
Foster, Don (Bath)


Browne, Desmond
Foster, Michael Jabez (Hastings)


Buck, Ms Karen
Foster, Michael J (Worcester)


Burden, Richard
Galloway, George


Butler, Mrs Christine
Gapes, Mike


Caborn, Richard
George, Bruce (Walsall S)


Campbell, Mrs Anne (C'bridge)
Gerrard, Neil


Campbell, Menzies (NE Fife)
Gibson, Dr Ian


Campbell, Ronnie (Blyth V)
Golding, Mrs Llin


Cann, Jamie
Gordon, Mrs Eileen


Caplin, Ivor
Grant, Bernie


Caton, Martin
Griffiths, Jane (Reading E)


Chaytor, David
Gunnell, John


Chidgey, David
Hall, Patrick (Bedford)


Clapham, Michael
Hamilton, Fabian (Leeds NE)


Clark, Dr Lynda (Edinburgh Pentlands)
Hanson, David



Harris, Dr Evan


Clark, Paul (Gillingham)
Harvey, Nick


Clarke, Charles (Norwich S)
Healey, John


Clarke, Tony (Northampton S)
Heath, David (Somerton & Frome)


Coaker, Vermon
Henderson, Doug (Newcastle N)


Coffey, Ms Ann
Henderson, Ivan (Harwich)





Heppell, John
Naysmith, Dr Doug


Hill, Keith
Oaten, Mark


Hinchliffe, David
O'Brien, Bill (Normanton)


Hodge, Ms Margaret
O'Brien, Mike (N Warks)


Hoon, Geoffrey
O'Hara, Eddie


Hope, Phil
Olner, Bill


Hopkins, Kelvin
O'Neill, Martin


Howarth, Alan (Newport E)
Öpik, Lembit


Howarth, George (Knowsley N)
Palmer, Dr Nick


Hoyle, Lindsay
Pendry, Tom


Hughes, Kevin (Doncaster N)
Perham, Ms Linda


Hughes, Simon (Southwark N)
Pickthall, Colin


Hurst, Alan
Pike, Peter L


Hutton, John
Plaskitt, James


Iddon, Dr Brian
Pond, Chris


Ingram, Adam
Pope, Greg


Jackson, Ms Glenda (Hampstead)
Powell, Sir Raymond


Jackson, Helen (Hillsborough)
Prentice, Gordon (Pendle)


Jenkins, Brian
Prescott, Rt Hon John


Johnson, Alan (Hull W & Hessle)
Primarolo, Dawn


Johnson, Miss Melanie (Welwyn Hatfield)
Prosser, Gwyn



Purchase, Ken


Jones, Barry (Alyn & Deeside)
Quinn, Lawrie


Jones, Helen (Warrington N)
Radice, Giles


Jones, Dr Lynne (Selly Oak)
Rapson, Syd


Jones, Martyn (Clwyd S)
Reed, Andrew (Loughborough)


Jowell, Ms Tessa
Reid, Dr John (Hamilton N)


Kaufman, Rt Hon Gerald
Rendel, David


Keeble, Ms Sally
Roche, Mrs Barbara


Keen, Alan (Feltham & Heston)
Rooker, Jeff


Keen, Ann (Brentford & Isleworth)
Rowlands, Ted


Kennedy, Charles (Ross Skye)
Ruane, Chris


Kennedy, Jane (Wavertree)
Ruddock, Ms Joan


Khabra, Piara S
Russell, Bob (Colchester)


Kilfoyle, Peter
Russell, Ms Christine (Chester)


King, Andy (Rugby & Kenilworth)
Salter, Martin


Ladyman, Dr Stephen
Sawford, Phil


Laxton, Bob
Sedgemore, Brian


Lepper, David
Sheldon, Rt Hon Robert


Leslie, Christopher
Shipley, Ms Debra


Levitt, Tom
Short, Rt Hon Clare


Liddell, Mrs Helen
Skinner, Dennis


Linton, Martin
Smith, Rt Hon Andrew (Oxford E)


Lloyd, Tony (Manchester C)
Smith, Angela (Basildon)


Lock, David
Smith, Jacqui (Redditch)


Love, Andrew
Smith, John (Glamorgan)


McAvoy, Thomas
Smith, Llew (Blaenau Gwent)


McCabe, Steve
Soley, Clive


McCafferty, Ms Chris
Southworth, Ms Helen


McCartney, Ian (Makerfield)
Spellar, John


McDonnell, John
Squire, Ms Rachel


McFall, John
Stinchcombe, Paul


McIsaac, Shona
Stoate, Dr Howard


Mackinlay, Andrew
Stringer, Graham


McNulty, Tony
Stuart, Ms Gisela


MacShane, Denis
Stunell, Andrew


Mactaggart, Fiona
Taylor, Ms Dari (Stockton S)


McWilliam, John
Taylor, David (NW Leics)


Mallaber, Judy
Temple-Morris, Peter


Marek, Dr John
Thomas, Gareth R (Harrow W)


Marsden, Gordon (Blackpool S)
Tipping, Paddy


Marsden, Paul (Shrewsbury)
Todd, Mark


Marshall, David (Shettleston)
Tonge, Dr Jenny


Marshall, Jim (Leicester S)
Touhig, Don


Marshall-Andrews, Robert
Trickett, Jon


Meacher, Rt Hon Michael
Turner, Dr Desmond (Kemptown)


Meale, Alan
Turner, Dr George (NW Norfolk)


Michael, Alun
Tyler, Paul


Milburn, Alan
Vaz, Keith


Miller, Andrew
Vis, Dr Rudi


Moffatt, Laura
Wallace, James


Moran, Ms Margaret
Ward, Ms Claire


Morris, Ms Estelle (B'ham Yardley)
Wareing, Robert N


Mowlam, Rt Hon Marjorie
Watts, David


Mudie, George
Welsh, Andrew


Mullin, Chris
Whitehead, Dr Alan






Wicks, Malcolm
Wood, Mike


Williams, Rt Hon Alan (Swansea W)
Woolas, Phil



Worthington, Tony


Williams, Alan W (E Carmarthen)
 Wright, Anthony D (Gt Yarmouth)


Willis, Phil
Wnght, Dr Tony (Cannock)


Willis, Phil
Wyatt, Derek


Wills, Michael



Wilson, Brian
Tellers for the Noes:


Winnick, David
Mr. David Jamieson and


Winterton, Ms Rosie (Doncaster C)
Ms Bridget Prentice.

Question accordingly negatived.

Mr. Cash: I beg to move amendment No. 58, in page 1, line 13, at end insert 'except Article 2(3)(b)'.

The Second Deputy Chairman of Ways and Means (Mr. Michael Lord): With this, it will be convenient to discuss the following amendments: No. 28, in page 1, line 13, at end insert
`other than in Article 2, paragraph 9.)'.

No. 29, in page 1, line 13, at end insert
`other than in Article 2, paragraph 10)'.

No. 33, in page 1, line 13, at end insert
`other than in Article 2, paragraph 15)'.

New clause 1—United Kingdom accession to Schengen Acquis—
.—No notification shall be given to the Council of the European Communities of a request from the United Kingdom to take part in some or all of the provisions of the Schengen acquis under Article 4 of the Protocol integrating the Schengen acquis into the framework of the European Union unless Her Majesty's Government has laid before Parliament a draft of the request, together with a statement affirming that its request extends to Gibraltar and will not be pursued unless accepted by the Council without qualification.'.

New clause 28—Border controls: implications for Gibraltar—
.—The opt-in to border controls pursuant to Protocol 4 to the Treaty of Amsterdam shall be exercisable by Her Majesty's Government only when each House of Parliament has come to a Resolution on a motion tabled by a Minister of the Crown considering the implications of the voting arrangements for such opt-in for the people of Gibraltar.'.

Mr. Cash: Thank you for calling my amendment, Mr. Lord. I also thank Madam Speaker and the Chairman of Ways and Means for selecting the amendments in my name.
I have grave reservations about the provisions to which my amendments refer. The Minister woefully failed to address flexibility in detail in the previous debate. It is at the heart of this group. We are on a slippery slope. The Government's negotiated opt-out on border controls and Schengen is another example of allowing the other member states to go ahead with the process and then claiming that we have secured a tremendous advantage.
I accept the distinction between the opt-out for monetary union, which is an on-going process of integration that continues to cause extreme embarrassment and difficulty and should have been vetoed at Maastricht, and this opt-out. There is a physical difference between us and the rest of Europe on border controls. Leaving aside the channel tunnel, I accept, as do the Irish Government, that being an island puts us in a different situation from the other member states. In that respect, the border controls opt-out is better than that for economic

and monetary union. However, the arrangements presuppose that we will be able to opt in later. Although that would be subject to unanimity, it is still a serious failure by the Government. They are clearly keeping open the possibility of opting in. Given their European philosophy, I believe that they intend to do so in due course.
7.45 pm
The Government have displayed considerable subtlety and, if I may say, some deceit in their approach to the issues. They know that the issue of border controls is contentious, as is immigration and asylum. They know that conceding the idea of the removal of border controls in the treaty would have been trespassing on dangerous territory. The negotiations that were being conducted by the previous Government with a view to ensuring that we would have an opt-out were well intentioned, although, for the reasons that I have already given, I believe that we should have shown more deliberate intention and action. I like to believe that a Conservative Government would have vetoed the Amsterdam treaty, including the provisions that we are discussing. I have heard it said that that was our intention. I sincerely hope that it was. I was also glad to note that we once mooted a referendum on the treaty. That idea has now been disposed of, as far as I can tell. There is not much enthusiasm for the new clause proposing a referendum.

Mr. Mike Gapes: In view of the hon. Gentleman's remarks about referendums, will he say that he is very disappointed that the Conservative party has changed its position? Why does he think that that has happened?

Mr. Cash: The Conservative party is committed to the idea of a referendum on the single currency, for which I campaigned during the Maastricht debates in 1993 and with my Referendum Bill shortly before the general election. I am delighted that the Government have also been forced to accept a referendum.
I have expressed before my views on a referendum on the Amsterdam treaty alone to my hon. Friends on the Front Bench. My views are, in a sense, not dissimilar to those expressed by the hon. Member for Somerton and Frome (Mr. Heath) on the previous group of amendments. We need a review of the whole process and there should be a referendum on the treaty on European union as a whole.

Mr. Gapes: rose—

Mr. Cash: I shall not give way just yet because I want to finish my argument.
For reasons that I have already given, it is illogical for us to allow the process of integration to continue, nibbling opt-outs and opt-ins here and there in the desperate hope that, like King Canute, we shall somehow be able to prevent the onward flood of the Rhine, as Chancellor Kohl described it in 1990.
The fact is that there is a total intention. We are kidding ourselves with the opt-outs if we believe that we shall be able to stem the flood, and we are creating more and more difficulties. The Amsterdam treaty, in particular, makes the position more difficult.
There is only one answer, and clearly it is not the Government's answer. It is to renegotiate the treaties. My suggestion in the amendment that I tabled on renegotiation was that a conference of all member states should be held—as should have happened with the intergovernmental conference that led to Amsterdam—to review not only provisions such as Schengen, border controls, immigration and so on, but all the treaties. The conference should make a judgment about the state of the Union, decide where it has been going wrong and then, by a process of review and renegotiation as proposed in my new clause, make a European Union or Community capable of working in the interests of all the member states. That would also avoid the difficulties inherent in opt-out arrangements such as those before us now.
The idea that we are not intended to be included in the areas of the opt-outs at a later stage is somewhat naive, to say the least, especially when one considers the fact that the opt-out from the social chapter was accompanied by provisions in a schedule saying that we would have to bear the administrative costs of running the operation when it went ahead. Of course, the same applies to other provisions in connection with the opt-outs.
With that general point in mind, and having expressed my grave reservations about the nature of the opt-outs—or opt-ins, whichever one cares to call them—I shall now deal with the question of what is inherent in the provisions before us. During the negotiations and discussions, much of the argument turned on the interpretation of article 7a, which had caused trouble and on which the European Commission had strong opinions.
The Commission and other member states believed article 7a committed them all to work towards the abolition of internal border controls for both Community and third-country nationals. However in 1986, at the time of the Single European Act, the United Kingdom had negotiated a declaration consistent with what was understood at that time. I must admit that the declaration was not legally binding.
Under the previous Government the United Kingdom consistently refused to accept the Commission's interpretation. I would have thought that the wording of the declaration was pretty clear:
Nothing in these provisions shall affect the right of Member States to take such measures as they consider necessary for the purpose of controlling immigration from third countries, and to combat terrorism, crime, the traffic in drugs and illicit trading in works of art and antiques".
However, after the intergovernmental conference we discovered that the negotiations, including the Government's acceptance of the Commission's interpretation, took us beyond that. The Government may argue that they established and obtained an exception for the United Kingdom, and that Ireland did the same for itself, but in fact they allowed the process to go ahead in line with the Commission's interpretation. For that they are woefully in default.
In article 63 there is a provision with respect to the five-year timetable for new measures on immigration into the Union, including those affecting refugees, displaced persons and the granting of asylum, which says that there should be
a balance of effort between Member States in receiving and bearing the consequences of receiving refugees and displaced persons".

That is accompanied by a further provision in article 64 which says:
This Title shall not affect the exercise of the responsibilities incumbent upon Member States with regard to the maintenance of law and order and the safeguarding of internal security.
Anybody can see that there is an inherent conflict between those two provisions. It is clear that the legal significance of that quotation from article 64 is not intended to contradict the ultimate commitment to abolish internal border controls. For that reason too, the Government are in default.
The Government have put a plausible but spurious spin on the negotiations that they conducted. Indeed, on 18 June when the Prime Minister came back from the intergovernmental conference he stated:
We have the power within the treaty to go into any of these areas if we want to. If we do not want to, we need not, but if we do, no other country can block us going in".—[Official Report, 18 June 1997; Vol. 296, c. 319.]
That was about the provisions in respect of the new title on immigration, asylum and visas.
Moreover, the Government's opt-out was entirely contrary to their declared policy of having no permanent opt-outs. In October 1995 I was rather encouraged when I heard the Labour party in opposition saying:
we reject permanent opt-outs or 'variable geometry'".
Yet we have just heard the Minister advocating a policy of flexibility that is precisely the reverse of his party's 1995 position.
I have opposed the concepts of flexibility and variable geometry for reasons that I gave during the debate on the previous group of amendments, and I make the same point in connection with the group before us: it is a slippery slope. In my judgment the policy is one of weakness and appeasement, because it will eventually lead to our being put in an impossible position.
That policy has already led us into an impossible position on monetary union. The European Commission was right to describe it as the best form of flexibility yet devised. None the less, what the Prime Minister said on 18 June was totally wrong, because the opt-outs have to be decided by unanimity.
That gives any of the member states the right to veto future opt-ins, so although the Government have the right to exercise a veto on future opt-ins—for Ireland, say—at the same time other countries will be in a position to veto our going in.
To make the situation even worse, we have allowed the others to go ahead already, so in many respects we shall get the worst of both worlds. I must make my point yet again, because the fact that for the time being we have what I prefer to call an exception, gives us at least a breathing space and an opportunity to renegotiate, so that we can have the comprehensive review of the state of the Union that is not only necessary but—I believe, as I see what is going on in Europe now, despite all the talk and claptrap—increasingly essential.
Sooner or later Europe will find that the British people will not accept the arrangements. We know that there is serious disquiet in other countries too. The problem is that the task of giving expression to that disquiet, and of revealing the uncertainty and unsettling nature of the


arrangements, is not helped by the lack of attention given to the matters that we are discussing today in the media, including much of the British press.

Mr. John Wilkinson: My hon. Friend is making some very important points. Do not the influx of Kurdish refugees into Italy and the substantial influxes of Czech and Slovak refugees—largely of Romany origin—into the Federal Republic and on to the UK demonstrate the grave threats that large movements of population pose to internal social harmony within the member states of the European Union? A number of Governments of the Union are clearly of the opinion that the Schengen arrangements cannot work and potentially pose a real menace to their societies.

Mr. Cash: That is true, and the Albanian situation in Italy last year makes that point. There is no point in people who are full of optimism and idealism, which is wholly misplaced, constructing legal frameworks in the belief that somehow we will end up with a single political union—in my judgment, one country—by taking down all border controls, and then, in the context of enlargement, imagining that we will not have floods of people coming in to take advantage of what they see as a honeypot. That will cause great civil unrest.
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Those are my reasons why the arrangements for enlargement will cause so much difficulty. If we are to continue to exercise a degree of sensible discretion over the people who are allowed to come in, things should stay as they are now. We should retain stability.
My objections to the provisions are not merely that they are the slippery slope to flexibility, but that we will be affected and contaminated by the civil unrest which I believe will visit the other countries when they are affected by influxes of refugees within the external borders that will be created around the new European entity called "Europe". That entity will be one legal area as well.
There is a proposal in directive 23 to create what is known as a corpus juris which would have the most dramatic consequences for the legal systems of the countries concerned. It would invade domestic jurisdiction with respect to extradition, habeas corpus and trial by jury. I would be departing from the central provisions of the amendments if I went into all those matters, but the Minister knows what I am talking about. He knows that this is a serious proposal and although it is not incorporated in the treaty at this juncture, it is all part of the thrust.
The reason why those involved want to bring down the borders is that they want to create one country. It is not just a matter of the free movement of goods, or anything like that. These provisions concern the freedom of persons—but which persons?
Not only was the Prime Minister entirely wrong in his interpretation of the proposals at the IGC, but the Foreign Secretary had to admit that there had been a misunderstanding, as he conceded in November last year. The Spanish Prime Minister moved an amendment early in the morning during the negotiations which meant that

opt-ins were subject to unanimity. We do not know what was on their minds at the time, but the Prime Minister and the Foreign Secretary—and, no doubt, their advisers—must have nodded off.
Unfortunately—I suspect that other hon. Members will want more of an explanation of this with respect to Gibraltar—the effect of the amendment was to give Spain the ability to insist on concessions on Gibraltar if the British Government ever decided to exercise the opt-in. In other words, it would be able to exercise the veto over us because unanimity is needed to allow the process to continue. I suspect that those more expert in that area will explain that.

Mr. MacShane: That has nothing to do with Schengen.

Mr. Cash: I hear the parliamentary private secretary muttering from a sedentary position that I have somehow departed from Schengen. It is quite astonishing that when we are talking about the removal of border controls—and about Gibraltar in particular—he should even consider raising objections. This matter is of grave concern to the people of Gibraltar.

Mr. Wilkinson: Have not these blackmailing tactics been used effectively by the Spanish before; particularly at the Edinburgh summit, where they said that unless they gained access to the Irish box and gained greatly enhanced arrangements for their fishing fleet, they would not allow enlargement to go ahead as previously envisaged?

Mr. Cash: My hon. Friend makes not only a good point on fishing, but an extremely good general point about the extent to which a country wishing to defend its national interest must be prepared to exercise the veto. It is the kind of arrangement currently under discussion where I believe the veto should have been used. We hear that the Dutch are threatening to use the veto with respect to the prospective entry of Italy into monetary union.

Mr. Doug Henderson: indicated dissent.

Mr. Cash: The Minister shakes his head. He knows more about this than me—I only know what I have read in the newspapers. It has certainly been circulated that that is the case.
The group of amendments raises questions about the validity of opt-outs or opt-ins and their worth, and I have shown that they are not worth much when we are dealing with the question of Gibraltar. I have grave differences with some members of my own party on this matter, as some Labour Members have differences of opinion with their colleagues. However, the 1971 White Paper said clearly that it was essential that we retained our sovereignty and the veto so that we could exercise it in our national interests. The interesting thing is that it went on to say that to do otherwise would imperil the very fabric of the Community.
The retention of the veto is regarded—as the Spanish understood—as a means of managing to preserve one's national interests. I am not saying that I agree with the Spanish, but they were smart enough to make sure that they did not lose out. By going for opt-outs as the second-best option and by a policy of appeasement and flexibility, we have ended up prejudicing our position and we are left swinging in the wind.
The other matters which arise in the context of this group of amendments include article 68, with respect to the European Court of Justice. Normally, being a part of the treaty establishing the European Community would mean that the ECJ would have jurisdiction. However, article 68 makes a substantial change. It modifies article 177, which deals with references by national courts to the ECJ for preliminary rulings on matters relating to Community law. Now, instead of references being able to go through the lower courts, only the highest national courts will be entitled to make references. I do not know if it is specified what the "highest national court" means. It could mean—although I am open to correction—the House of Lords, and that would be a serious matter.
I would like to hear from the Minister about that: is it intended that the highest national court should be only the House of Lords—after all, Factortame was initiated there—and that the other courts, such as Queen's Bench, should be excluded? There are procedural rules that would enable us, if we so wished, to initiate actions that could have direct applicability. If my concerns are justified, there could be a serious inhibition of the rights of people in this country to initiate action, because people cannot simply walk into the House of Lords and ask it to make a reference.
I have not heard that point made before, and I am not absolutely certain of my ground, but I am entirely sure that it is a matter that needs careful consideration because of the way in which article 68 is formulated, and that this is the time to do it. I hope that the Minister will have an answer for me by the end of this debate.
Furthermore, not only are the highest national courts the only ones entitled to make references, but they must do so when they consider that a European Court of Justice ruling is necessary to enable a judgment to be given.
That takes us back to section 2, I believe, of the European Communities Act 1972. It is certainly true that under that legislation we are obliged to give effect to judgments of the European Court, but article 68 puts the position the other way round: it is not only a matter of whether, as a result of due process of law, a provision ends up in the European Court; as I read it, an obligation is imposed on the national courts to go to the European Court. That could lead to some extremely expensive and difficult situations that would otherwise have been avoidable.
Article 68 is an "Open, sesame". Instead of our being able to decide, as the previous Government sometimes rightly did, that we do not need to refer a matter to the European Court, it appears that the presumption is being reversed. With the obligation on a court to make the reference where it is deemed necessary, it will be extremely liable to make such a reference. That should have been thoroughly analysed and dealt with in the treaty.
A great deal of criticism has been heaped on article 68 by the United Kingdom-based Immigration Law Practitioners Association. I do not agree with its conclusions, because it would prefer more movement towards allowing people to enter the country willy-nilly, but it takes an objective view about the article, and says:
In view of the length of time which it takes for a case to make its way to a court of final instance in any Member State, this means that we can expect at least five years of major legal uncertainty in this field.

The association specialises in European law, and I do not know whether the Minister has had a chance to assess its statement, but I hope that it has had a satisfactory answer from the Government.
The new title, because it is a separation out of the original third pillar, has brought such matters into Community competence, and therefore, for the first time, within the aegis of the Court of Justice. It also has the overall effect, which I deplore, of increasing the influence of the Court of Justice over the national courts. I do not know what the reasoning behind that is. It is a retrograde step.
Every time that we examine such treaties, we find that almost all the concessions are running in one direction. Everything is a concession to more and more jurisdiction by the Court of Justice and more and more administrative controls by the European Commission; and so it goes forward inexorably.
The other provisions that cause me concern add up, in a nutshell, to the creation of a new border arrangement that will have extremely detrimental effects on the rest of Europe and that, in my judgment, will also have an extremely detrimental effect on the United Kingdom, because the cumulative uncertainty and instability that they will create will ultimately damage all the member states.

Mr. Andrew Mackinlay: I want to speak mainly to new clause 1 and, coincidentally, to new clause 28, which relate to Gibraltar. When the parliamentary private secretary to my right hon. Friend the Foreign Secretary, my hon. Friend the Member for Wolverhampton, North-East (Mr. Purchase), and I visited Gibraltar with some other hon. Members last autumn, as the guests of the Gibraltar Government, the real democratic deficit that exists for Gibraltar came home to me. That, in a sense, is why I am standing here today: there is nobody else to articulate the Gibraltar people's concern about the implication of the articles relating to the Schengen acquis.
I do not want to rake over old coals or to refer to how we got into this position, which I have done on several previous occasions both in the Chamber and in the Foreign Affairs Committee, but clearly there is a need to table the new clause so as to probe the Minister on how he intends to ensure that the interests of the people of Gibraltar are protected, not only for as long as he holds office but in relation to his successors, be they Labour, Tory or whatever.
People may ask what all the fuss is about, given that we do not intend to sign up to Schengen. That may be the position at the moment, but it could change. I am a pro-European, but I join company with those who are opposed to Europe in believing that there will inexorably be a move for us to sign up, wholly or in part, to some aspects of Schengen in the foreseeable future. It may be in the next decade or in the next score years, but I believe that, as sure as night turns into day, a United Kingdom Government will find that they have to sign up to some of it.
Under the treaty as it is, that Government will have to seek the unanimity of the other states to sign up to the acquis, and it seems to me pretty certain that Spain will exercise its veto in relation not to the United Kingdom


of Great Britain and Northern Ireland but to the United Kingdom of Great Britain and Northern Ireland along with Gibraltar.
The present Government have closed down the option to go in, having given an undertaking that they will not surrender the interests of the people of Gibraltar, but I am not confident that future Governments, whatever their political complexion, would not sacrifice the people of Gibraltar if they considered that it was in the interests of the United Kingdom as a whole to go into Schengen. That is the great problem that we face. All too often, successive Governments of both parties have disregarded the interests of the people of Gibraltar. It is time that that stopped. I hope that my being awkward about the issue means that someone in the Foreign Office has had his backside kicked and will be a bit more sensitive in future to the interests of the people of Gibraltar. I also hope that that message will endure for some years to come.
In the Amsterdam treaty and the other treaties, references to the United Kingdom are always deemed to include Gibraltar. If a future Government decided that the United Kingdom should sign up to Schengen, would it be possible to hive off Gibraltar, or would the Government be bound by the treaties to include Gibraltar? If that were so, my new clause 1 would not be necessary.
To buttress my argument, I remind the Committee that the United Kingdom has opt-outs on the social protocols. As a result, Gibraltar is also outside the social protocols. It does not say in the treaty, specifically, that Gibraltar is "outside", but because the United Kingdom is out, Gibraltar is out too. It follows that treaty references to the United Kingdom include Gibraltar unless the contrary is specifically stated. The provision under which the United Kingdom and Ireland can apply to enter the Schengen acquis, in whole or in part, contains no specific exclusion for Gibraltar.
I hope that the Minister will tell me that new clause 1 is unnecessary because the Government and any future Government would be bound by the treaties to take Gibraltar along if they applied to sign up to Schengen. I invite the Minister to say that I am wrong in believing that the new clause is necessary, because the issue is buttoned up by the treaty.
The Gibraltar Government and I fear that the treaty has also closed down a constitutional option for the future of Gibraltar. Under the treaty of Utrecht, it is possible for Gibraltar to be incorporated into the United Kingdom and we should not close down that constitutional option. The future constitution of Gibraltar is open to discussion, but by suggesting to the Spanish Government that we might be prepared to separate Gibraltar, we prejudice our ability to incorporate Gibraltar into the United Kingdom for electoral and other purposes in the future. That would be a pity.
I hope that I have made it clear that reference to the United Kingdom in the Amsterdam and other treaties must also include Gibraltar. I hope that the Minister will confirm that it is not within the competence of the Government to exclude Gibraltar, as a matter of expediency, if and when they make an application to join Schengen. If that is not the case, I hope that I will obtain support for new clause 1. My hon. Friend the Minister of State is an decent man and will not let the people of

Gibraltar down, but we do not know who will sit on the Treasury Bench in future. Future Ministers must not forget the interests of the people of Gibraltar. I want it locked into the Bill that the interests of the people of Gibraltar cannot be disregarded.

Mr. Michael Howard: The hon. Member for Thurrock (Mr. Mackinlay) made some cogent points and I shall return to the subject of Gibraltar myself in due course. I hope that the hon. Gentleman will receive answers from the Minister at the end of the debate.
The provisions in the treaty relating to the free movement of persons and citizenship, and the attitude of the Government towards them, are among the most significant to come before the House of Commons. It is an absolute outrage that we are allowed barely an hour under the guillotine motion to consider matters of such fundamental importance.
The treaty incorporates the Schengen agreement, which provides for the dismantling of internal frontiers in the European Union and free movement of persons within its area. It is ironic that within such a short time of the treaty being agreed we read daily reports of action taken by various member states to strengthen their border controls.
The questions raised by border controls pose in acute form the dilemmas that arise when a choice has to be made between different desirable, but irreconcilable, objectives. In an ideal world where there is no threat to the stability of nations from the prospect of unlimited immigration, where there is no sudden shift in populations as a result of political or economic changes and where there are no dangers from the importation of drugs or arms, the free movement of persons unhindered by frontier controls would be desirable. It would be desirable not only in the European Union, but across the world. It is undoubtedly an attractive concept, but we do not live in an ideal world. We live in a world where there are such threats, such shifts and such dangers and where nations need the protection of frontier controls.
I suspect that the future course of these provisions will be fraught. I believe that the member states of the Union, when the provisions are in force no less than now, will wish to escape their full vigour and to retain an element of control. They may find that it is too late. The provisions will be subject to the jurisdiction of the European Court of Justice and if it adopts its customary approach to the interpretation of the treaty the countries involved may find themselves defenceless.
The previous Government had a clear view on the matter: we always refused to join the Schengen agreement and we made it plain that we would never join it, but we had no objection to other member state incorporating the agreement into the treaty as long as we had a watertight opt-out from it. The Labour party's attitude in opposition was equivocal, as it was on so many issues. It proclaimed its devotion to frontier controls, but it also insisted that it was against opt-outs, as my hon. Friend the Member for Stone (Mr. Cash) pointed out. The Labour party's policy document of October 1995 stated:
we reject permanent opt-outs or 'variable geometry'".
How those contradictory positions were to be reconciled was never explained.
In any event, agreement was reached before the election by the previous Government. Other member states would get what they wanted, which was the incorporation of


Schengen into the treaty, and we would get what we wanted, which was a watertight opt-out. That was a done deal. It does the present Government no credit to claim it as their own.
The present Government were left with the difficulty caused by their previous opposition to opt-outs, so the Prime Minister hit on the characteristically disingenuous tactic of describing the provisions as an opt-in. When he made his statement to the House on 18 June, he said:
Under the treaty, the United Kingdom can also participate in areas of interest to us if we so choose, at our option. That is not an opt-out but an opt-in, as we choose.
He later stated:
We have the power … to go into any of these areas if we want to. If we do not want to, we need not, but if we do, no other country can block us going in."—[Official Report, 18 June 1997; Vol. 296, c. 313–19]
We now know that the Prime Minister was utterly wrong. He had not achieved what he thought he had achieved and what he told the House he had achieved. The truth is that any country can block our going in because the treaty provides that we can go in only with the unanimous agreement of the other member states. That is bad enough, but what has made matters so much worse is the inability of the Foreign Secretary and the Minister to give any consistent explanation of how that blunder, on a matter of considerable importance, came about. My hon. Friend the Member for Stone advanced one scenario. He says that it happened because in the early hours of the morning, in the closing stages of the summit, the Spanish Prime Minister put forward an amendment and, literally or metaphorically, the Prime Minister and the Foreign Secretary were nodding off and they failed to spot it.
My hon. Friend incorporated into his criticism the advisers to the Prime Minister and the Foreign Secretary. I must say on their behalf that they are immune from criticism: they were not present. At the closing stages of the summit, only the Prime Minister and the Foreign Secretary are present, so no criticism should be attached to advisers for what may or may not have happened in the early hours of the morning in the closing stages of the summit.
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That scenario, suggested by my hon. Friend the Member for Stone, is very far removed from the extraordinary series of explanations, each of them inconsistent with the rest, that have been put forward by the Foreign Secretary and the Minister of State. The first explanation was that the presidency's note keeping was not what it should have been. That was what the Foreign Secretary told the Foreign Affairs Committee on 4 December 1997.
Then it was a hole in the corner deal done between Spain and the Dutch presidency, kept secret from the other member states and incorporated in the treaty after the negotiations had finished. That was the explanation given in an oral answer at Foreign and Commonwealth Affairs Question Time on 25 November 1997.
The next explanation was that it was a deal done not after the negotiations, but during the summit on the night of 16–17 June before the negotiations had finished, but still kept secret from the other member states and incorporated in the treaty without their knowledge. That was what we were told on 2 December 1997.
Then it was both—a deal done in the margins of the summit and discussed afterwards. That is what we were told by the Minister of State, the hon. Member for Newcastle upon Tyne, North (Mr. Henderson), when he wound up the debate on the European Union on 4 December 1997.
What we do know is that the Dutch Government sent a letter to the British Government about this matter on 16 July 1997. Alas, we could only surmise about the contents of that letter. Despite the Government's lip-service to openness—indeed, despite the provisions on openness in the Amsterdam treaty—they will give us no clue about the contents of the letter.
Why, given the seriousness of the allegations, have the Government taken no action? I hope that the Minister of State will tell us tonight why they did not raise the matter at the Luxembourg summit. Why are they not insisting that the procedures of these summits are revised so as to ensure that nothing of the kind ever happens again? We are entitled to a full explanation. We have not had one, but we shall continue to press for one.
Whatever the cause, the upshot of it all is that any single country can block any application by the United Kingdom to join any part of the Schengen arrangements. It is not an entirely academic question. The hon. Member for Thurrock says that the Government have no intention of joining any of the Schengen arrangements, but he knows that the Foreign and Commonwealth Office submitted a memorandum to the Foreign Affairs Committee that is printed in that Committee's report. The memorandum says that there may well be advantage in applying to join the information arrangements of the Schengen agreement. So this is not an academic question; it is a live question. This is something that matters, and it matters now.
Any country, as a result of what is a bungle for those who believe my hon. Friend the Member for Stone, treachery and underhand dealing by Spain and the Dutch presidency for those who believe the Government—

Mr. MacShane: indicated dissent.

Mr. Howard: Oh yes. Is it not treachery and underhand dealing to do a hole in the corner deal that is kept secret from the other member states? That is the allegation made by the Foreign Secretary.

Mr. MacShane: indicated dissent.

Mr. Howard: The hon. Gentleman shakes his head in disbelief. I quite agree that it is an absolutely extraordinary state of affairs, but that is the allegation made by the Foreign Secretary. If the hon. Gentleman is in any doubt, I invite him to read Hansard for 25 November 1997, column 754. It is all set out there.
Spain can therefore block any application for the United Kingdom to join any part of the Schengen arrangements and we are told by the Government that Spain was responsible for the extraordinary shenanigans over this matter.
Spain has a history of using any and every bargaining counter to further its claim to Gibraltar and putting as much pressure as possible on the United Kingdom in relation to Gibraltar. That is why my hon. Friend the Member for South-West Devon (Mr. Streeter) and


I tabled new clause 28. The exigencies of the timetable motion mean that we cannot press it to a vote, but it marks our concern at the incompetent bungling that was the hallmark of the approach of the Prime Minister and the Foreign Secretary to the negotiations at Amsterdam.

Mr. David Heath: I shall be brief because I know that other hon. Members wish to speak before the guillotine strikes.
To my surprise, I agree with the hon. Member for Stone (Mr. Cash) that the position on opt-ins and opt-outs is not satisfactory. I also agree with him that there is a need for regular review of the Schengen arrangements. Britain is not currently part of those arrangements, but it is appropriate, now that the Schengen acquis is to become part of the acquis communautaire, that those arrangements are regularly reviewed, and I hope that they will be.
One of the aspects that I hope will be reviewed in the near future, given the prospect of enlargement, is the unnecessary—but perhaps unavoidable—waste of the continual shifting of the entire border control mechanism from border to border as each country accedes, and the inevitable expense. I can see no one easy way around that—other than an arrangement to make it possible to purchase second-hand border control points—but there appears to be a need to see how the Schengen acquis works in the context of enlargement.
My principal reason for speaking is to take up the matter of Gibraltar, which was amply illuminated by the hon. Member for Thurrock (Mr. Mackinlay) and the right hon. and learned Member for Folkestone and Hythe (Mr. Howard). Questions must be answered about Gibraltar.
I am very disappointed that the Foreign and Commonwealth Office is not including Gibraltar in the independent territories review, because there are serious questions to be asked about the democratic deficit in Gibraltar—and in the other dependent territories. Those issues should be addressed. The specific aspect that applies only to Gibraltar is that it is part of the territory of the European Union by treaty yet has no access to the democratic machinery of the European Union. That position is unsustainable.
I shall now discuss the failure of the Foreign Secretary and the Prime Minister, or whichever of them was involved, to realise what was happening in the Amsterdam negotiations. As I have said, I believe that the appropriate response of the British Government is to say sorry that they failed to do their clear duty to the people of Gibraltar and to the people of Britain: to ensure that their interests were properly protected.
The episode in which the Foreign Secretary tried to explain his position to the Foreign Affairs Committee, of which I am a member, and failed utterly to be convincing in doing so, followed by a memorandum from officials in the Foreign and Commonwealth Office that did nothing to assuage the feeling that a blunder had occurred, and the extraordinary allegation that this was a matter of poor record keeping, was extraordinary.
The conference at Amsterdam was an intergovernmental conference under the Dutch presidency. I do not believe that the Dutch are especially renowned for being an inefficient people, yet it is claimed

they cannot keep a simple record of proceedings that accords with the recollections of members present. That claim beggars belief. If it is impossible to examine the records and check what happened, that reveals a huge gap in the record keeping processes.
All that is history. We now have a Spanish veto. In the previous debate, the hon. Member for Reigate (Mr. Blunt) supported the fact that the Spanish had a veto. I find that hard to reconcile with what his Front-Bench colleagues say, but in any event the Spanish have their veto. We now need some assurances from the Minister.
First, we need assurances on the argument that the hon. Member for Thurrock made about the definition of the United Kingdom. I fear that the hon. Member for Thurrock will not be satisfied on that. I fear that the definition of the United Kingdom will not include dependent and Crown territories unless they are specifically included, so any future United Kingdom Government who apply to join the Schengen arrangements will have expressly to include those areas.
Secondly, the Minister should announce what strategy he will employ to overcome any future Spanish veto during negotiations. The Foreign and Commonwealth Office must have thought about that. The Government have been landed in a position in which they may wish to accede to all or part of the Schengen acquis, and they must have some way of overcoming the Spanish veto.
Thirdly, the Minister should tell us how he will ensure transparency of the British position that gives confidence to the people of Gibraltar that they will not be left out. That is what the amendment—and new clause 1, tabled by the hon. Member for Thurrock—would achieve. If they were put to the vote, I would support them, but it appears that that will not occur, so we shall have to accept the Minister's assurances—if any are forthcoming.

Mr. Gapes: I am pleased to see that the hon. Member for Stone (Mr. Cash) has re-entered the Chamber in order to hear my speech. He used some interesting language in his contribution. He talked about the establishment of a new European entity called Europe. Whatever one calls it, the British people have lived on the continent of Europe for many thousands of years. The reality is that Europe is a complex entity that is changing. It comprises individual sovereign states that have chosen to co-operate and to come together for mutual benefit.
I must address the interesting remarks of the hon. Member for Stone about borders. Many of the countries of Europe share land borders. The United Kingdom is unique in that it is an island and shares only the border between Northern Ireland and the Irish Republic. That is an interesting border. For many years, people have moved freely from the Irish Republic to Northern Ireland and vice versa. There is passport-free travel between Holyhead and Dublin on the ferry and citizens of the Irish Republic are able to live, work and vote in elections in the United Kingdom. According to the hon. Member for Stone, we should have put up the barriers, built the watch towers and stopped those people entering the country. Had we done that, Britain would not have benefited from the significant contributions to its economy by the Irish in Britain over many years.
Another interesting example is the border between two recent members of the European Union, Sweden and Finland. I am fortunate to have had the opportunity to


travel a few years ago along the Nordkalloten highway through Sweden, Finland and Norway and north of the Arctic circle. People can travel from Rovaniemi in Finland, through a border post at Pello and into Sweden. There is no physical means of preventing them from doing that; there is no impediment to travel—people simply carry on along the road.
As I like to collect mementos of my travels, I wanted to get a stamp in my passport to show that I had crossed from Sweden to Finland. When I went to the passport control office on the Finnish side of the river in Pello to get my passport stamped, I was greeted warmly by officials who acted as though they had not seen anyone in days or weeks—perhaps even years or decades. My passport was duly stamped with the Finnish entry stamp, and it was obviously a great occasion for passport officials who were not used to doing that.
The fact is that people travel freely across European borders. Sweden and Finland are sovereign independent states with an interesting history. Anyone who has visited southern Finland will know that the relationship between the two countries has not always been amicable—in the past, there were conflicts, wars and questions of national identity. Nevertheless, there is no physical barrier to travel between those two countries.
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The countries of continental Europe that share land borders have decided that they wish to allow ease of movement in order to facilitate trade, human contact and relationships between towns that are situated either side of common borders. Anyone who has visited Strasbourg will know that a suburb of that city is situated in Germany and that people travel across the border without any complications. Countries have taken that step for perfectly good, logical reasons.
Britain is in a different position geographically: we are an island with our own history. Therefore, our Government took the appropriate decision when the matter was discussed during negotiations at Amsterdam. There is no doubt that there are problems with Schengen. Difficulties have arisen with Turkish immigrants, many of whom are fleeing oppression and some of whom are pursuing economic opportunities. That movement is putting great pressure on several European Union countries.
If we are to have a single market and if people are to travel easily between countries, we must work out a common relationship regarding the external frontiers of that economic union. That is why the proposals make a great deal of sense to countries such as Germany, France, Holland, Belgium and Luxembourg.
However, the proposals do not make absolute sense in all circumstances. We are in a different position: apart from the channel tunnel rail and road links, we do not share common land borders with other countries. We can exist quite happily outside the Schengen arrangements adopted by other European Union states. I think that that answers the questions raised by the hon. Member for Stone in one of his familiar scare stories.

Mr. Howard: Is the hon. Gentleman aware that, as a result of the guillotine motion for which he voted, only 10 minutes remain for debate on this question? Is he further aware that several hon. Members have put forward

specific questions for answer by the Minister of State? Is the hon. Gentleman engaged in some kind of filibuster to protect the Minister from having to answer those questions? Labour Members are among those who put questions to the Minister of State. Will the hon. Gentleman please conclude his remarks so that we may hear the Minister's answers?

Mr. Gapes: The right hon. and learned Gentleman should refer his remarks to the hon. Member for Stone. I came into the debate from a Committee upstairs, where I had to listen to what could have been regarded at certain times as a filibuster by Conservative Members, so I could not take part in the debate in the Chamber until the present set of amendments. I have been present for that entire period, and I believe that I have a right to speak, as does any other Member. Although I am not a former Minister or a Privy Councillor, I believe that I have the right, like every other Member, to raise matters that are of concern to me. I shall continue to do so for one more minute, and then sit down.
Amendment No. 28 deals with citizenship. It is clearly designed to undermine the Amsterdam treaty and stop the United Kingdom ratifying it. The amendment does not take account of the fact that the Amsterdam treaty is a great improvement on the Maastricht treaty, because a phrase was inserted in the Amsterdam treaty at the suggestion of the Danish Government which makes it clear that citizenship of the Union shall complement and not replace national citizenship.
I do not understand why those who have emphasised national aspects wish to remove that from the Bill and the treaty. That is ridiculous. If they are keen to emphasise the national aspect of the European Union, they should welcome the fact that the Danish Government, supported by our Government, inserted that provision in the treaty.

Mr. Christopher Gill: I am appalled that the guillotine on this important matter prevents me from making the speech that I wanted to make, particularly with reference to Gibraltar. Fortunately, most of the questions relating to that serious problem have been posed by my right hon. and learned Friend the Member for Folkestone and Hythe (Mr. Howard) and the hon. Members for Thurrock (Mr. Mackinlay) and for Somerton and Frome (Mr. Heath). I shall sit down so that the Committee may have the opportunity of hearing the Minister answer those important questions, which the people of Gibraltar want to hear answered satisfactorily.

Mr. Doug Henderson: I am grateful to colleagues on both sides who have restrained their remarks to allow me to make important responses to important questions. The right hon. and learned Member for Folkestone and Hythe (Mr. Howard) should not blame my hon. Friends. The Opposition have had since 4.30 pm today to discuss a series of amendments. If it was the Opposition's judgment—I can tell the right hon. and learned Gentleman that I know about being in opposition—that a three-hour debate on this matter was necessary, they could have had it. Until this set of amendments, only one contribution from the Government Benches was not directly in support of the Government's position. The Opposition have the authority and could have insisted on a three-hour debate.
I would not have raised the matter, if the point had not been laboured by the right hon. and learned Gentleman. Within the period allocated to this subject, his colleague,


the hon. Member for Stone (Mr. Cash), took 35 to 40 minutes to make his point. I am not complaining about that. It is up to the Opposition how they divide their time. There are important issues to discuss, and I must move on.
In the sections of the treaty covered by this group of amendments there was a recognition of the British system of border controls, which is so important to our nation, as both sides of the Committee would acknowledge. Such recognition was never obtained by the previous Government. We have recently seen further evidence of the difficulties experienced by the Schengen countries in regulating the flow of people. That draws attention to the different systems, and emphasises the strength of our system.
As my hon. Friend the Member for Ilford, South (Mr. Gapes) described in his contribution, other landlocked countries prefer to adopt different ways of regulating the flow of people. The Amsterdam treaty provides, for the first time, protection for both systems. That is a major achievement which the British people will recognise as a huge gain for this country.
The hon. Member for Stone asked what was achieved in return for movement by the British Government. That was a major achievement, which the previous Government could not make. No decisions were taken, in effect, by the IGC for about six months before the British general election, because there was no engagement in the issues by the then British Government, which would have allowed our partners in Europe to say, "This is an important priority to you; these are important priorities to us. Can we put them together and produce an acceptable formula that we can present to the summit in Amsterdam, which would allow decisions to be made?" That is how progress is made. The right hon. and learned Gentleman is not correct to say that, before the fall of the previous British Government, they had the agreement of the other EU partners.

Mr. Howard: The Minister is distorting history shamefully. Is he aware that we were not asking the other countries for a favour? They wanted something from us. They wanted the Schengen agreement to be incorporated in the treaty. We had a veto over that. We agreed to accede to their request, as long as we had a watertight opt-out. That was the basis of the agreement that was reached at the Foreign Affairs Council in March last year.

Mr. Henderson: I hear what the right hon. and learned Gentleman says. He demonstrates my point. I am not suggesting that the previous Government did not know what they wanted to achieve in the negotiations. However, because of the ossification of those negotiations, there was no movement, and no confidence from the other partners. They made that clear to us. When I walked through the doors of the IGC in May, the first thing that they asked me was, "Are you here to pontificate to us or to negotiate?" I replied that I wanted to be positive and constructive. By implication, I recognised that I could not have my way all the time. That was a realistic position.
I shall move on, in the time that is left, to the case presented by my hon. Friend the Member for Thurrock (Mr. Mackinlay). I assure him that, in relation to Gibraltar, it is the British Government's intention to

protect the interests of Gibraltar and to do that in co-operation with the Gibraltar Government and the people of Gibraltar. He asked whether Gibraltar would automatically be covered by any agreement reached in relation to Schengen, were it the British Government's intention at some time in the future to enter into the Schengen acquis.
The answer is that, where a measure is introduced under the European Community treaty—in other words, a first pillar measure—Gibraltar is included by virtue of article 227, paragraph 4, of the treaty, except where Gibraltar remains outside a Community policy—in some instances in the past, the Gibraltar Government have wanted to remain outside a Community policy—or where it is expressly excluded. The answer to the first part of the question is that, in pillar 1, Gibraltar would not necessarily be covered.
In the third pillar, in relation to Gibraltar, as in the case of anything else, the Government would have to take a position at the time. Gibraltar may or may not be included, depending on what was desired. That would be determined in conjunction with the people and the Government of Gibraltar. I hope that that answers the point.
The hon. Member for Stone raised a fairly complicated legal point. I could give him an answer now if he wished, but I would run out of time. Therefore, in the remaining minute, I propose quickly to summarise the position, and I shall write to the hon. Gentleman before Third Reading with the answer that I would have given now. If he wishes to raise the matter again then, I am sure that, given his parliamentary ingenuity, he will be able to find a way to do so.
In essence, many things could be said about this section of the treaty. It is vital for Britain's interests that included in the treaty are the provisions that we believe are essential to protect our traditional system of border control. We do not have the same system as many other countries in landlocked Europe of identity cards, where the forces of law and order traditionally check people's identity where required. That is not the way in which we operate or want to operate.
Our system has served us well. That does not mean that it will not change. It will have to change technologically and in other ways to meet the demands of the day. However, those changes will be determined by the British Government, and the same is true for the Irish Government. That was a major achievement in the treaty, and that was something which the previous Government found unobtainable.

Mr. Cash: Having listened to the debate and expressed my grave reservations about the provisions in question, it will not be necessary for me to press the matter to a vote. However, I feel strongly that the Minister has completely failed to answer some severe criticisms—

The Chairman of Ways and Means (Sir Alan Haselhurst): Order. I take it from what the hon. Gentleman says that he seeks the leave of the Committee to withdraw the amendment.

Mr. Cash: Yes. I beg to ask leave to withdraw the amendment.

Amendment, by leave, withdrawn.

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Mr. Cash: I beg to move amendment No. 26, in page 1, line 13, at end insert
`other than in Article 2, paragraph 7)'.
The amendment deals with the question of discrimination and arises by virtue of article 6a inserted into the Amsterdam treaty. Article 2, paragraph 7 states:
Without prejudice to the other provisions of this Treaty and within the limits of the powers conferred by it upon the Community, the Council, acting unanimously on a proposal from the Commission and after consulting the European Parliament, may take appropriate action to combat discrimination based on sex, racial or ethnic origin, religion or belief, disability, age or sexual orientation.
My concern about that provision is simple. Within the context of the principle of subsidiarity, and the argument that we hear over and over again that that which is better dealt with at a national level should be dealt with at that level, there is no reason whatever for that provision. I note that it states that the Council would have to act unanimously, but the reality is that it is a step forward in the total integration of the cultures of the European Union.
There is, I am afraid, an underlying theme, which is to undermine the individual decisions that may be taken within any one member state as to the kind of provisions that they wish to have made in terms of sex, racial or ethnic origin, religion or belief, disability, age or sexual orientation. No one could accuse the United Kingdom of having anything other than an enlightened statutory framework in respect of those matters. Any attempt to impose standards and requirements upon us in the context of those various matters would be wholly inappropriate.
Let us for a moment consider what the words "may take appropriate action" are intended to mean. Do they mean that we could be visited by not only directive but regulation, which would be enforceable upon us as a matter of law without further legislation? I do not know. If it had said that there would be a power to introduce these matters by way of directive, I might have taken exception to that. We have the right and the power to decide such matters for ourselves. We already have the effective Race Relations Act 1976, and I see nothing wrong with that. I am completely against any suggestion of discrimination on the ground of race, and, as far as I am aware, the United Kingdom has long operated perfectly satisfactorily with those laws. I think that those laws were passed as long ago as 1965 or 1968.
Before Labour Members get stirred up—I see them looking through their papers—in the hope that they can cause me some embarrassment because they think that I am about to say something that gives rise to the idea that I am in favour of discrimination, I must tell them that I am not. I am concerned that the proposal is outside the proper jurisdiction or understanding of how the European Union should function. On the principle of subsidiarity, it is completely and utterly outside the arena where such laws should be implemented.
Some difficult questions arise with respect to age, for example. Does the Commission propose to change the law with regard to compulsory retirement? People do not seem to have thought the matter through. I speak as a member of the European Select Committee, which considers over and again provisions that are merely called "communications". Would it be appropriate for there to be a communication, or would it be a directive or a regulation? We do not know. Perhaps the Minister can throw some light on the matter. He may have given it no thought—to judge by his face, he has not.
The idea that we should be subjected to a flow of legislation on those questions is extraordinary. Let us consider the words:
to combat discrimination based on … religion".
What is the reason for that? Why is it thought necessary to have a Europewide arrangement to deal with such questions? I cannot believe that it is necessary in the United Kingdom, and if it is good enough for us to govern ourselves as we do at present, why should we think in terms of accepting a provision in a treaty that makes a different provision for the Community as a whole?
Discrimination in respect of religion in the United Kingdom was dealt with more than a century ago. My family happened to be Quakers in the 17th, 18th and 19th centuries, when there was severe discrimination. Indeed, a famous case in the House of Commons was that of Bradlaugh, who refused to take an oath and was suspended from the House as a result—and worse, I think. As it happens, I am also a Catholic, and I have experienced no discrimination whatever in the United Kingdom. I see no reason why it should be necessary for us to be a party to a treaty that applies legislation across the whole of the Community—even if it is proposed that it should be unanimous—with respect to religion. What on earth is going on? What is the purpose of that?
We know that the real purpose is to create a homogeneous society—to change individual countries' cultures, and thereby also change their identities, to produce a degree of homogeneity in respect of matters relating to sex, racial or ethnic origin, religion, belief, disability and sexual orientation. The object of the exercise is to try to create uniformity in law across the Community. That fits in with title II of the Maastricht treaty, which deals with citizenship. The question of citizenship was raised in the last group of amendments.
I distinctly remember that title II of the Maastricht treaty states that citizenship should be left undefined for the time being, but that the blanks should be filled at a later date when the manner in which it should be prescribed is decided. This provision is an attempt to put flesh on the bones of citizenship in a European context. Its purpose is to deal with discrimination based on sex, race and ethnic origin, but it will cause great difficulty.
I am concerned about the implications for age, agism and the elderly. Who is to say that legislation would not be introduced by the Council of Ministers, which would not be described as discrimination as it would come from such a high authority, that would alter the provisions on age or sex in a manner prescribed by member states acting together, but which would change the laws of the United Kingdom in a way that no one had envisaged?
The reference to sexual orientation is extraordinary. Is not paedophilia a sexual orientation? There has been a spate of serious cases in Belgium and in the United Kingdom. Will people pray such provisions in aid to generate the impetus for bringing paedophilia into a homogeneous European legal framework? I envisage serious difficulties as a result of this ridiculous attempt to create such a European law. The argument that what I have described is far-fetched can be repudiated by reference to the United States, where laws are being strictly construed by the courts along those lines in individual states. Those laws have been introduced to combat discrimination, but they have had the reverse effect. Tensions are created by politically correct laws,


and that is causing enormous embarrassment to the people who originally introduced them with the best of intentions.
I have no doubt that such issues as race should be covered by proper legislation. However, I cannot for the life of me understand why it is thought necessary for the treaty to provide, albeit with the requirement of unanimity, a framework within which such matters can even be conceived of as matters to be dealt with at a European level. What is the reason for that?
Some Labour Members are brimful of political correctness and want to lower the age of consent to 16, but many other people in this country are not at all happy for such a provision as is set out in this article to be applied in this country, let alone at a European level.
A simple question lies at the root of my amendment. Why is it thought necessary to deal with these matters at a European level? The Minister obviously considers this a laughing matter, but I should be grateful if he would explain it. Will he answer my simple question? Why is it thought necessary or desirable for these measures to be taken at a European level, albeit with unanimity?
If the Minister says that he does not think that we will ever exercise the powers—because, with unanimity, we would veto any such provisions—I am bound to ask him a second question. Why did he not prevent the provisions from being introduced in the first place? The provisions are in the Bill—with the consent of this Labour Government—for a reason, and I think that the House is entitled to know what that reason is.

Mr. Tony McNulty: I happily accept that the hon. Member for Stone (Mr. Cash) is not pro-discrimination. It would be silly to charge him with that, and I am grateful to him for clarifying his position. I have to say, however, that his interpretation of the part of the treaty that is under discussion was, to say the least, perverse.
I have been reading Hansard. In an earlier debate, the issue of paedophilia and sexual orientation was raised. It seems that we are now really digging in the dirt to create an anti-European, indeed Europhobic, dimension. In fact, the situation is quite the reverse. I hope that the Government will support this part of the treaty, because—as the hon. Gentleman said—Britain has such a good, strong record in all these legislative areas, although its record is not impeccable.
Interestingly, even in her wildest moments as Premier, Lady Thatcher did not touch legislation on sexual discrimination, race relations and similar matters. That is not because our legislation was perverse; indeed, I do not think that it goes nearly far enough—but, as has already been pointed out, it is probably the jewel in the crown in terms of anti-discrimination legislation in Europe. Why not use such experience and expertise, which until recently could be used in a non-partisan way?
With the best will in the world and the greatest respect, I must say that, until the cranks took over what appear to be all aspects of the official Opposition's policies, there was cross-party support for all anti-discrimination proposals. That being the case, why not go further?

Why not proselytise, and exploit that strength and expertise in a European dimension? Who could oppose Europewide anti-discrimination directives?
It is interesting to note that one shibboleth that the hon. Member for Stone could not employ was the word "unanimity". Time after time, we have heard the words "albeit by unanimity". I do not understand how combating, Europewide, discrimination based on sex, race or ethnic origin, religion or belief, disability, age or sexual orientation—short of the perverse interpretation of "sexual orientation" that has just been mentioned—can be opposed. Perhaps we need to look further to discover some of the underlying reasons.
As I have said, I fully accept that the hon. Member for Stone is as opposed to discrimination as anyone else, but I do not extend that generous interpretation to some others in his ranks. The hon. Member for Buckingham (Mr. Bercow) is not present, but it is nevertheless worth pointing out that part of his rich and varied history involved his being secretary of the race and repatriation committee of the Monday club. That is entirely up to him, but, if he had tabled the amendment in the terms used by the hon. Member for Stone, I would find it rather more difficult to believe that he was against discrimination.

Mr. Wilkinson: On a point of order, Sir Alan. Is the hon. Gentleman aware that, before making personalised attacks of this kind, it is normal to inform the Member concerned in advance, so that he has the opportunity to hear the observations and, if necessary, defend himself and his motives?

The Chairman: It is not so much a matter of order; it is a matter of courtesy to the House that an hon. Member who intends to refer to another hon. Member should advise him beforehand or refrain from making such comments.

Mr. McNulty: With the greatest respect, I was merely quoting historical fact in relation to some of the confreres of the hon. Member for Stone in order to challenge their reasons for supporting the amendment in the Lobby if and when there is a Division. I fully accept that the hon. Member for Stone is not in favour of discrimination, but it is entirely appropriate to suggest that others in his ranks are not of that persuasion. I would say further—

The Chairman: Order. The hon. Gentleman is teetering on the brink of great discourtesy. The point has been well explained: if an hon. Member refers to another hon. Member, he should, out of courtesy, inform him beforehand.

Mr. McNulty: I accept that, Sir Alan, and am grateful.
In general terms, there is a wing, a faction, in what is currently called the Conservative party—at least, in England, although I think that it is changing its name in Scotland—that has, at best, a murky past when it comes to issues of discrimination.

Mr. Swayne: Does the hon. Gentleman accept that there is a body of religious opinion which extends well beyond the bounds of the Conservative party and which believes that homosexual practice is immoral? That opinion is based on scripture. How does the


hon. Gentleman view the treaty's provisions with respect to the right of those people to practise discrimination in their own affairs on the basis of that belief?

Mr. McNulty: The hon. Gentleman has missed the point entirely. It is not a morality or anti-morality clause in the treaty; it is an anti-discrimination clause. Clearly, those—and I accept that there are plenty—who, on moral grounds, take the rather intolerant view that homosexuality is perverse or wrong are fully entitled to that opinion. But they are not entitled to have that moral position frozen into law, whether on a European or a British basis.

Mr. Swayne: If I were to believe that homosexuality was odious to men and detestable to God, and based that view, as many do, on scripture, would I not have the right if, for example, I owned a small shop and wished to take on an employee, to ensure that that employee was not a homosexual?

Mr. McNulty: That has proved my point entirely; no, the hon. Gentleman would not have that right under employment law. He would not have that right any more than I, were I the proverbial small shopkeeper, have the right to decide that people with frazzled, grey hair were not suitable employees—that is as perverse a point as the one that the hon. Gentleman made. I am grateful that the hon. Gentleman has made his position on discrimination against women clear—it is equally as daft as some of his other suggestions, and I do not think that it is appropriate.
It is appropriate to challenge, at least in part, the underlying motives behind at least some of those who will support the amendment. Some—there has been a litany of them tonight—will do so purely to wreck things so that we cannot ratify the treaty, which is fine; they are entitled to that position. Others, who shall remain nameless as a courtesy to them, belong to the wing of the Conservative party that agrees with comments such as those made in an immigration and repatriation committee report in the early 1980s. In that committee
it was formally agreed that the policy of the Committee should be an end to New Commonwealth and Pakistani immigration; a properly financed scheme of voluntary repatriation, the repeal of the Race Relations Act, and the abolition of the Commission for Racial Equality; particular emphasis on repatriation".
That is an historic view that has been prevalent, albeit among a minority, in the ranks of the Conservative party. Happily, I have no evidence that it is prevalent among those who are here tonight. But there are those who sit in the twilight zone of intolerance and who are not in favour of anti-discrimination legislation, whether in a British or a European dimension.
Under our presidency, we have a real opportunity to say to most of the rest of Europe, which in many cases has dragged its heels in anti-discrimination legislation, "Here is the starting point. Here is Britain's happy record which was established on a cross-party basis throughout the 1970s and 1980s. Not even Lady Thatcher changed our approach." Britain can be a beacon for European legislation.
Some would say—I would not necessarily say this—that there are far too many caveats and qualifications in terms of the implementation of anti-discrimination legislation. There are references to unanimity and to

legislation being appropriate to the legislative body of each member state. Those qualifications mean that, by the time anti-discrimination measures come before national legislative bodies, they will not be as effective or as strong as our proud history of anti-discrimination legislation, which is a pity.
From the 1960s onwards, Britain has been in the vanguard—one of the few instances where this has been the case—in achieving a level playing field in employment practices. We now want to take that forward on a European basis. All hon. Members should be saying that we have a lesson to teach Europe on anti-discrimination legislation.
We should not go for some of the perverse interpretations of anti-discrimination legislation. We should fully support article 6, and we should have no truck with the wrecking nonsense proposed by the hon. Member for Stone or with the more intolerant, cranky and frankly racist views of some Conservative Members. I repeat that none of them is present tonight. I ask the Committee to reject the amendment.

Mr. Wilkinson: I support amendment No. 26, partly because I was not fortunate enough, as a result of the guillotine so shamelessly imposed by the Government, to speak in the debate on citizenship. Amendment No. 26 illustrates the ramifications of the concept of European citizenship being universally applied, whether with or without their consent, to all nationals of countries within the European Union.
Article 6a will codify a power for the European Union to be at its most intrusive in those aspects of its citizens' lives which are particularly private or sensitive, and which ought in any normal jurisdiction to be a matter for them. As my hon. Friend the Member for Stone (Mr. Cash) rightly argued, the article demonstrates the total fallacy of the Labour Government's claim to be upholders of the principle of subsidiarity. How can a bigger organisation at the centre of the ramshackle and often fraudulent and corrupt empire that is the European Union presume to have any legislative role in people's domestic, social or employment arrangements in the member states?
I am sure that the hon. Member for Harrow, East (Mr. McNulty) and others will argue that there are safeguards, inasmuch as the Council will have to act unanimously. Over the years, however, we have come to learn the hard way that, by a process of horse trading, moral blackmail and political intimidation, powers encapsulated within the treaties can be used by member countries of the European Union to impose their will in other areas on other countries of the Union.
Let us examine the detail of the provision. First, a proposal must come from the Commission. Under the treaty, the citizenry of the European Union have the right, do they not, to petition or to make representations to any institution of the European Union? Presumably, therefore, if a citizen feels that he cannot in this country get adequate redress from the Commission for Racial Equality—if it is a matter of racial discrimination—off will go his submission to the Commission. That type of representation can be replicated throughout the European Union.
The Commission, as the guardian of the treaty, with the European Court of Justice, will wish to justify its existence in this area of competence. Man hours and


expenditure will therefore be devoted to a matter that is properly one for national Governments and not for the bureaucratic institution—the Commission—at the centre of that ramshackle empire.
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The European Parliament will also be involved, because it must be consulted. Presumably, therefore, in the Parliament's busy schedule of peregrinations between Brussels, Strasbourg and Luxembourg, it has time to consider those matters, too. That will mean further cost and a further burden on the citizens of the European Union. How can Members of the European Parliament—more remote as they are, because they do not hold the same surgeries as we do and are not in the same daily contact as we are with our electors—presume to have better understanding than elected representatives in the nation states on matters of discrimination
based on sex, racial or ethnic origin, religion or belief, disability, age or sexual orientation"?
What will be the appropriate action in the eventuality that, by means of that horse trading or blackmail, an individual country is induced to relinquish its veto and accept European jurisdiction in that sphere? There would, I presume, be a directive; there might be a regulation. Whatever it was, it would not be as appropriately tailored to the needs of the individual nation state as a nation's own legislation. We know that from the way in which directives are discussed in our European Standing Committees. We cannot amend European directives, or even vote them down. As for European regulations, they are imposed from above our head, without any consultation in this Parliament.
There could, I suppose, be some other type of measure—some countervailing measure—that is perhaps harder to envisage now but that could be equally a nuisance to individual countries.
The matter may seem trivial, and we may seem far-fetched in our objections. However, we are witnessing yet another attempt—in which the Government are wholly content; they acquiesce in and encourage such activity—to make the Commission and the institutions of the European Union even more intrusive in the daily lives of our people than they are already.
In our country as in other countries of the European Union, a feeling of deep resentment and of bitterness is understandably building up. They—our people—have never been consulted on those matters. They assumed that their own Parliament was the custodian of their interests and their civil liberties—but no. We look now to a superior authority in Brussels. Even in such intimate matters as sexual orientation, belief, religion or ethnic discrimination, Brussels will have the final say—to some extent by virtue of the treaty—rather than national Governments.

Mr. Fabian Hamilton: Before I came to the House, I had heard that the hon. Member for Stone (Mr. Cash) was somewhat anti-Europe, so I was taken aback by some of his views as to why the article was included in the Amsterdam treaty. He said that it was a step towards the total integration of the European Union, that the United Kingdom's enlightened legal and statutory

framework was quite sufficient and that we needed no more legislation to prohibit discrimination in the rest of Europe. I totally reject that view.
I represent a constituency with one of the largest and most diverse multicultural communities in the United Kingdom. People from different parts of the Commonwealth and the world now reside in my constituency as British citizens. They have different religions and different colour skins. I wonder whether the hon. Gentleman has asked anyone such as Norris Pyke, one of my good friends who was born in St. Kitts, who is a British subject and who is a black West Indian, whether he has had problems when travelling in Europe and whether he has ever suffered discrimination. Of course he has, simply because of the colour of his skin.
The hon. Gentleman is right to say that in that respect the United Kingdom has excellent legislation—the Race Relations Act 1976. Indeed, we have led the way internationally in showing how legislation can overcome discrimination, especially against people from different racial backgrounds. We do not have the type of political correctness to which the hon. Gentleman alluded. The Race Relations Act outlaws positive discrimination.
In the United Kingdom, we do not believe in positive discrimination. It was deemed illegal to have women-only shortlists for Parliament, as positive discrimination went against the spirit of all the legislation that we have passed over the years, which promoted equality of opportunity. Positive discrimination has brought into disrepute many of the laws in the United States that were supported by those who believed that political correctness would overcome discrimination. We do not have that in the United Kingdom. We have a model set of laws, which have gone a long way in fighting racial discrimination.
The hon. Gentleman mentioned religious discrimination. He said that he was brought up as a Quaker and is now a Catholic and that many of the laws that discriminated against Catholics and other denominations of Christianity were passed in the last century. However, there is still enormous discrimination against Muslims in the United Kingdom and in Europe.
One of my constituents, Shakeel Razak, was born in Karachi, came to the United Kingdom when he was three years old and was brought up in Leeds. He is a citizen of the United Kingdom, but he has encountered discrimination in the United Kingdom and in Europe. When travelling as a British citizen abroad, he has suffered a great deal of discrimination in Europe because of his religion.
The article could help to block the appalling material that is appearing on the internet, especially some of the 250 or so websites about holocaust denial, for example. Tomorrow I am travelling to Bonn with Lord Janner, a former Member of this House, to meet the President of the German Bundestag and members of the German Government responsible for trying to police the internet. They have ideas that could be adopted Europewide, given that the internet knows no boundaries. Such legislation could help us to counter the racist and offensive material that is increasingly appearing on websites.
I hope that that trip will make us better informed here. It will certainly give us a lot of information on how Parliament can frame legislation through Europe and conduct a Europewide fight against the horrible material that appears regularly on the internet.
The hon. Member for Ruislip-Northwood (Mr. Wilkinson) said that the provision was part of a tendency to be increasingly intrusive in the daily lives of the citizens of Europe. It will give us a Europewide framework to help us to overcome some of the discrimination that is seen and felt by our citizens from different racial backgrounds and religions travelling in Europe, as well as such citizens who live in France, Germany and other parts of Europe. Overcoming racial discrimination and bringing us closer to racial harmony, multiculturalism and a way of living together throughout Europe, embracing not just the different nations, but the different cultures, religions and racial backgrounds, will help to produce a better Europe for all the citizens of the United Kingdom and abroad.

Sir Teddy Taylor: The hon. Member for Leeds, North-East (Mr. Hamilton) spoke with great sincerity. I hope that I can convince him that he is wrong. I am sorry that the hon. Member for Harrow, East (Mr. McNulty) has left the Chamber. Harrow may be a lovely place, but it has a nasty habit of returning Members of Parliament of all parties with whom I disagree. He said very clearly that we should not worry about the measure and that anyone who voted against it was anti-European. Now he has departed, after making a scandalous and offensive speech, but he should appreciate that those of us who agree with the amendment moved so ably by my hon. Friend the Member for Stone (Mr. Cash) support democracy.
Considering how the Labour party has fought so vigorously in the past for the rights of individuals to have a say in their own affairs, it is very worrying that a Labour Government are bringing forward a treaty that takes more powers away from democracy. I am sure that the Minister appreciates, as Conservative Ministers have found before, that to get what he wants at European meetings, any Minister has to agree to lots of other little clauses being inserted. The Government would not necessarily have inserted the provision on their own.
The protection of unanimity has been mentioned. If the Minister speaks to the Minister of Agriculture, Fisheries and Food, he will be well aware that many measures are introduced in Europe simply because one Government are anxious to get a measure through. Because they are so anxious for something to be done, they agree to bring forward legislation that they do not want. That is the basis of horse trading, not democracy, but that is how legislation is put through.
I hope that the hon. Member for Leeds, North-East appreciates that using European institutions is not necessarily the best way to get the right law. When there are 12 people sitting round a table, the result is often a thorough mess.
Handing over more power to the European Court of Justice will not necessarily give us the right sort of justice. The rulings of the European Court of Justice are not an interpretation of law or fairness. It brings forward crazy proposals, based on its desire to be a legislative assembly without democracy. Recent decisions of the European Court of Justice on discrimination have had devastating consequences for member countries.
For example, if hon. Members speak to their friends from the Republic of Ireland and ask about the consequences of the Grogan judgment in 1991, they will

be horrified. They could also look back to 1994 in Cornwall, when the most unusual decision was made about someone who had changed sex.
Hon. Members should be well aware that if we pass over powers to the European Court of Justice, we are passing that power totally outwith any democratic control. For example, on a different subject, we should look back at the repeal of the Merchant Shipping Act 1988, which was passed by the House of Commons on the basis that it had been approved not only by the House but, by the back door, by the Commission. Yet it was retrospectively repealed by the European Court. We must realise that that was a huge intervention in the democratic process.
9.45 pm
It is appalling to hand over more power to Europe, because it means the passing of legislation that we cannot change. If, after his appalling speech, the hon. Member for Harrow, East ever comes come back into the Chamber to listen to a debate, I hope that he will appreciate that the principle of democracy in this country means that if we pass a law that does not work or turns out to be unfair—to a particular ethnic minority, for example—we can do something about it. The tragedy with Euro-law is that once it goes through, nothing can be done.
I have not spoken in the debate before, so I hope that I shall not be accused of wasting time when I say that anyone who doubts what I say—especially if he or she believes in democracy, as true socialists should—should ask himself or herself why such an organisation has not been able to resolve problems. An example is the appalling protection racket of the common agricultural policy, which is so unfair to the poor and wastes so much money.
If, following the proposal before us, we hand over more power to the European Court and European legislation, we are simply taking away the power of the people. Some people feel that that does not matter, because at the end of the day the same people will decide the same things. I know that some individuals in the House regard the whole business of democracy as a bit of a joke and say that the same people decide things, no matter which system we have. I do not believe that.
If we pass over such a massive chunk of activity to Europe, it will simply mean bad law, not because Europeans are nasty people, but because when 12 countries are sitting round to try to determine something, we never seem to get the right or the fair answer. Moreover, the people's power to do anything about that bad law will fade away.
Finally, I shall say something about the views that have been expressed about the measure. The organisation Christian Action, Research and Education was worried about the proposals, especially those on sexual orientation. It was concerned about what they would mean for its employment policies, so it wrote to the Foreign Office asking whether litigation could arise. The answer, on 7 July, was that although the Foreign Office
would not expect litigation to arise",
it could not be ruled out.
If Euro-legislation comes forward, it will be interpreted by the European Court, and that is not good news. Unfortunately, we find that rather than interpreting law,


the European Court tends to expand the powers of the European agencies. I therefore hope that the Government will do one simple thing arising from the amendment.
I ask the Minister, and especially exciting new Members such as the hon. Member for Harrow, East, why more and more power has gone away from democracy to the European Union since we signed the treaty of Rome, and nothing has come back to democracy. Does the hon. Gentleman think that it is a good idea to pass such treaties giving additional powers to Europe when nothing comes back to the democratic process?
Would it not be a great thing if at the next meeting of the European Council, Ministers, some of whom I greatly respect, because on some issues they have achieved a great deal, for which I am grateful, set up some kind of committee or tabled a proposal to ask whether some things could come back to the democratic process and away from the European situation?
If we simply sit back and let more power go to the European process, which is devoid of direct democracy and in which nothing can be resolved even if it turns out to be nonsense, and more power is given to the European Court, over which the people and their democratic assemblies have no control, it will be bad not only for democracy in this country but for the whole of Europe.
I therefore hope that after such a silly proposal, which could produce nasty results, the Government will take the initiative and concentrate on trying to find out whether there is some way of taking some power back to democracy from non-democratic organisations, rather than taking away powers from democratic Parliaments that could do something about the problems. Issues of sexual and racial discrimination are important, and we have a duty to protect minorities and people with problems. I believe that a democratic assembly that can pass laws and then change them if they are wrong, unfair or offensive is the right way to pass law—not simply giving more power to non-democratic institutions in the EU.

Mr. Bill Rammell: First, I wish to refer to the comments of the hon. Member for Rochford and Southend, East (Sir T. Taylor). From the speeches that I have heard from him in the Chamber, I can say that I respect his belief in democracy and that he speaks with passion and conviction on these issues. However, I have to say that he is fundamentally wrong, and I ask him to reflect on some of the points that he made.
The hon. Gentleman referred to issues of concern to him within the European debate, such as the money wasted on the common agricultural policy—a view that many of us share. Part of the problem with the CAP is that it was designed when Britain was not participating in Europe and was not involved in the discussions. Therefore, the CAP was framed for the needs and concerns of other countries that had different farming industries from Britain.
In terms of a single European currency, one of my fears is that we might miss the boat, but will be forced to join later because we shall not be prepared to pay the price of staying out of a strong single currency. However, the key decisions will have been made on the framing of the currency. I ask the hon. Gentleman to reflect on that.
I was also interested in the hon. Gentleman's remarks on the European Court of Justice, about which many criticisms can be made. One of the issues about which I am concerned is that the European Court of Justice has difficulty in interpreting European Union law because it has no access to the deliberations when the law is framed. The key decision-making Council, the Council of Ministers, is not open and members of the European Court are not aware of the discussions that have taken place.
The remarks of the hon. Member for Ruislip-Northwood (Mr. Wilkinson) caused me great concern and confusion. He said that, in his experience, there was resentment and bitterness among the British people with regard to Europe and the EU. Genuinely, that is not my experience from talking to people on the doorstep about the treaty, the European Union or other European matters. However, there is confusion and a lack of understanding about the way in which Europe works.
We have heard comments this evening about the low turnouts at European elections. The turnouts are low not because people lack interest in what is happening in Europe, but because they treat the European Parliament with the respect that they believe it deserves in terms of its power. They do not believe that the Parliament has power and teeth, and therefore accord it the power that they think it deserves.
I was also taken by what the hon. Member for Ruislip-Northwood said about anti-discrimination legislation which, he said, intrudes on private and sensitive areas of people's lives. I struggled to come to terms with what he meant by that. In my view, discrimination is about the use of power actively to discriminate against someone because of their sex, race, ethnic origin, disability or sexual orientation. That is not a private activity: it is a public abuse. To say that the state has no role in combating discrimination shows an unwarranted disrespect towards the issues.

Mr. Wilkinson: The hon. Gentleman touches on the core of the issue. If the power were to be vested in the state—the nation state—whose Government's actions are modified by an elected Parliament that is close to the people, those people could have confidence. The article gives to Brussels, a more remote and bureaucratic institution, the power to intervene in matters that are often for subjective judgment and on which the Commission for Racial Equality in our own country finds it hard enough to give an opinion.

Mr. Rammell: If Brussels and the operations of the European Union are remote from people's understanding and experiences, that is an argument for opening up decision making in the European Union, opening up the Council of Ministers and improving the scrutiny process. A person who has directly suffered from either sex or race discrimination will not be concerned whether the relief comes from Brussels or from a national institution.
The hon. Member for Stone (Mr. Cash) said that we did not need any proposals or articles from Europe because Britain had an enlightened attitude and record. I ask him to reflect on the Asylum and Immigration Act 1996, pushed through by the previous Government, whereby responsibility was placed on employers to check the nationality status of their employees; small employers' groups took the view that that undermined confidence in race relations. That is not an enlightened approach.
I ask the hon. Gentleman also to reflect on what was known as clause 28, which went out of its way to pillory people because of their sexual orientation and to encourage discrimination against them. That was not an enlightened approach. Before we get on our high horse and say that everything is perfect in our back garden and that discrimination is a problem only in Europe, I would ask Conservative Members to reflect on what has happened in our country in the past 18 years regarding discrimination and equal opportunities.
The hon. Gentleman asked the rhetorical question where the instances of sexual discrimination were, and said that we did not have a problem in the United Kingdom. My hon. Friends have already drawn attention to some problems that we have. One of the most pressing issues in the House at the moment is the struggle to find a resolution to the conflicts in Northern Ireland; communities on both sides of the divide would say that discrimination on the basis of religion at the very least has something to do with the situation. It is wide of the mark to say that such problems are nothing to do with us.
The hon. Gentleman said that he was not in favour of discrimination. I accept that, because I know, from working with him on the Select Committee on European Legislation, that he is indeed an honourable Gentleman; but he went on to distort completely the aims of the article and of the treaty. He said that article 6a was about changing the culture and the identity of the nation states and the people in them. I ask him to reflect on his contention that it was about changing cultures and identities. What aspect of British culture would be eroded by preventing discrimination?
There is often a problem with the language used by Conservative Members in debates such as this. They do not bring enlightenment or open up the issues to ordinary people, but distort what is taking place. That was especially the case, regrettably, when the hon. Gentleman mentioned paedophilia and claimed that it was a sexual orientation that could come under the auspices of that part of the treaty. That is wide of the mark and his accusation had no basis in fact. Paedophilia is illegal in every state of the European Union and that position will not be affected by the legislation. The hon. Gentleman was making an unworthy attempt to smear the treaty and the proposal.
It seems as if we have been participating in debates on the Bill for a lifetime, since before Christmas. I sometimes feel as if I am participating in a meeting of a strange sect, or at least a caucus meeting of the Members of Parliament who were expelled from the Tory party and lost the Whip before the general election.

It being Ten o'clock, THE CHAIRMAN left the Chair to report progress and ask leave to sit again.

To report progress and ask leave to sit again tomorrow.—[Mr. Dowd.]

Committee report progress; to sit again tomorrow.

Tuition Fees (Scotland)

Motion made, and Question proposed, That this House do now adjourn.—[Mr. Dowd.]

10 pm

Mr. Andrew Welsh: I am grateful for the opportunity to debate a matter of great concern to students, their families and higher education institutions in Scotland. The Government's policy on higher education is full of flaws and anomalies. Tonight, I wish to address one of those anomalies—the unwillingness of the Department for Education and Employment to fund adequately the fourth-year tuition fees for nonScottish-domiciled UK students at Scottish universities.
I was appalled when the Government first announced proposals to introduce tuition fees in July. I tabled an early-day motion that pointed out that the proposals would discriminate against students in Scottish universities and the traditional four-year Scottish honours degree. The Garrick report also highlighted that problem and recommended that
the Secretary of State should ensure that the contribution from Scottish graduates for qualifications gained in Scotland is equitable with the contribution for comparable qualifications gained elsewhere in the UK.
The Minister for Education and Industry responded by announcing that
to ensure equity of treatment for Scottish students with students on shorter courses in England and Wales, the Government has decided that Scottish students should not pay the £1,000 tuition fees for the final year of a degree course where it is a year longer than the comparable course in England and Wales.
However, in solving one problem the Scottish Office exacerbated another. The problem stems from an ambiguity in the word "Scottish". When Garrick spoke of Scottish graduates, he clearly meant all those graduating from Scottish universities, regardless of nationality. The Minister's solution will create a situation in which Scottish students at Scottish universities will have their fourth-year tuition fees paid, but non-Scottish UK students will not. That is clearly discriminatory towards potential English, Northern Irish and Welsh students who recognise the value of a Scottish four-year honours degree.
I welcome the fact that there is no similar discrimination against European Union students who will be protected by European Union rules. The Scottish Office has said:
The Government is committed to treating students from European Union countries on the same basis as students from the UK as far as tuition fees are concerned.
However, that is not actually true. What that means is that the Government will treat European Union students applying to Scottish universities in the same way as Scottish applicants and, therefore, European Union students will not have to pay tuition fees in the final year of their course. That only highlights further the discrimination against non-Scottish-domiciled United Kingdom students.
English, Welsh and Northern Irish applicants to Scottish universities will be expected to pay up to £1,000 more than Scottish or European Union students for exactly the same course, given the same background


circumstances. To put it simply, at St. Andrews university, a student from St. Ives or St. Albans will have to pay £1,000 more than a student from St. Etienne.
In a written answer, the Under-Secretary of State for Education and Employment, the hon. Member for Pontypridd (Dr. Howells), said:
The EC Treaty requires Member States not to discriminate on grounds of nationality against nationals of other Member States, on matters within the scope of the Treaty. However, EC law does not intervene in internal matters and require each Member State to treat all its own
citizens
in exactly the same way."—[Official Report, 1 December 1997; Vol. 302, c. 10–11.]
In other words, because European law does not prevent the Government from discriminating against their own citizens on the ground of nationality, the Government can do as they please.
That principle simply cannot be justified. There would have been a massive—and justified—public outcry, had the Government proposed the imposition of up to £1,000 extra for tuition fees on ethnic or religious grounds. How, then, can the Government justify this discrimination against English, Northern Irish and Welsh students?
Hon. Members may wonder why it is left to the Scottish National party to oppose the Government's proposals for higher education. For those who portray us as "narrow-minded nationalists", it might seem strange that the SNP is defending the rights of the English, the Northern Irish and the Welsh, but for those who know us it is simply a case of the SNP promoting a just cause and opposing discrimination within the British Union. The SNP, in co-operation with the Scottish Ancients, the National Union of Students and the higher education institutions, has identified three main reasons for opposing this policy. I am happy to acknowledge that we have received support from other political parties that join us in this campaign, but I wish to state the three main reasons.
First, the SNP and the Scottish universities warmly welcome students from other parts of the United Kingdom, who form an integral part of the diversity of the Scottish education system. Those students make up 48 per cent. of students at Edinburgh university, 45 per cent. at St. Andrews, 36 per cent. at Dundee and 32 per cent. at Stirling. English, Welsh and Northern Irish students must not be deterred from coming to Scotland, but they will be under the Government's policy.
Secondly, the SNP fears for the future of the Scottish higher education system. Any sizeable drop in applications from other parts of the United Kingdom will force universities to downsize their diverse range of courses. There is also a danger that Scottish universities may well be forced to consider abandoning the traditional four-year honours degree, replacing it with a three-year course, so as to compete on a level playing field to attract non-Scottish UK students.
As one university lecturer commented to me,
The four year degree is being killed
by Government policy.
Tuition fees will back us into a corner, forcing a cut in the course length with the resultant loss of jobs and the drop in standards of the traditional honours degree.

Thirdly, there are important implications for the Scottish economy. The McNicholl report, published by the Committee of Scottish Higher Education Principals two years ago, identified that "rest of UK" students at Scottish universities contribute more than £110 million annually to the Scottish higher education system. In addition, every year they contribute £100 million in off-campus expenditure on Scottish goods and services.

Mr. Tam Dalyell: One hundred million. He said billion.

Mr. Welsh: I very much appreciate the hon. Gentleman's correction because it is £100 million—would that it were £100 billion.
Therefore any fall in applications to Scottish higher education establishments from other parts of the United Kingdom will have a considerable impact on the wider Scottish economy.
What of the cost to students? Since the introduction of student loans, the drop-out rate has dramatically increased—by 12 per cent. Without Government action by the DFEE to remedy the anomaly, we shall witness a drop in student applications to higher education, and spiralling student debt. There was a time when the Labour party in opposition fully endorsed the principle of free education for all according to ability and regardless of wealth. In 1994, 42 current Labour Members of Parliament—including three current Ministers—called upon the Conservative Government to
halt the slide towards self-financing by students".
With the abolition of maintenance grants and the introduction of tuition fees, one may ask where it will end.
When the Australian Government introduced tuition fees, students had to pay only an average of 23 per cent. of the total fee. However, that figure has now risen to 45 per cent. Top-up fees were also ruled out, but will be permitted from next year. The reassurances that the United Kingdom Government have given to students here are similar to those given to Australian students. Our student organisations and educational institutions are right to be wary about the future.
The unwillingness of the DFEE—the Secretary of State is absent from the Chamber tonight—to provide funds for its own students will have an adverse effect by discouraging students from the rest of the United Kingdom from applying to Scottish universities and colleges on financial grounds. It is not acceptable for the Secretary of State to insist:
quality of education at universities in Scotland is such that those who are privileged enough to have earnings that will oblige them to pay the full £1,000 fee will feel that it is worth the investment"— [Official Report, 13 November 1997; Vol. 300. c. 1020.]
If that is the case, why do Scottish students have their fees paid? The Government's policy is simply inconsistent.
The DFEE will go on to use a second flawed argument to justify its current stance. In an oral answer to the House, the Under-Secretary of State for Education and Employment, the hon. Member for Pontypridd said:
Many Scottish universities offer students with good A-levels the option of entering the second year of a four-year honours course, so it should be possible for students from England and Wales to get a Scottish degree after paying for the same number of years as they


would have taken to graduate at a university elsewhere in the United Kingdom."—[Official Report, 13 November 1997; Vol. 300, c. 1028.]
That assertion is not a solution for several reasons. Only a small number of non-Scottish United Kingdom students currently receive direct entry into the second year of undergraduate courses at Scottish universities, and that figure has decreased in the past three years. In percentage terms, more Scottish than English students gain access to the second year of university courses.
Direct entry into the second year is not possible in all courses—nor is it advisable for educational reasons. The Association of University Teachers has stated:
many students find the transition too difficult and either drop down into first year or have to retake the second year.
Perhaps the most surprising aspect of this debate is what it will cost to create a level playing field. The DFEE has estimated the total cost of funding the fourth-year tuition fee for English students attending Scottish universities at £1.5 million. That is a small part of the overall Government budget, but it will have a large effect on individual students and their families and on the Scottish higher education system.
I would like to help the Minister by suggesting where he might find some of that money. During the summer, the Government spent £170 million on seven new Trident missiles. That commitment to weapons of mass destruction would abolish the fourth-year tuition tax for non-Scottish United Kingdom students for the next 100 years. In a choice between nuclear weapons and education, the SNP knows which priority should prevail.
I shall address three key inconsistencies in the Government's position. Take, for example, a Scottish pupil who moves from North Berwick to Berwick shortly before he applies to a Scottish university. Even though that pupil has spent all his education years in the distinctive Scottish system, if eligible, he will be forced to pay the fourth-year fee due to his place of residence at the time of application. That is both absurd and unjust.
The Department for Education and Employment's failure to recognise the uniqueness of the four-year degree and to fund students accordingly leaves an interesting paradox for the Minister. If an EU migrant worker living in London applies to a Scottish university for a four-year degree, under the provisions of the Maastricht treaty, the local authority will have to fund that course. The DFEE will have to make provisions for dealing with that request, so the mechanism will be in place to finance tuition fees for its students' fourth years at Scottish universities. The DFEE is discriminating against its own European nationals in favour of students from other member states.
Lastly, the Minister is on record as stating:
Students who take a year out between two separate courses of higher education will have their eligibility reassessed as new entrants at the beginning of the new course."—[Official Report, 12 January 1998; Vol. 304, c. 126–27.]
That would leave the anomaly of a non-Scottish UK student successfully applying for a Scottish university course, funded by his local authority, then leaving and reapplying to the Scottish Office as a domiciled Scottish student for funding to change course. That student would presumably be entitled to fourth-year funding, and the Scottish Office would have the extra costs of paying for the whole of the higher education course fees for that student.
I trust that the Minister will use all his persuasive power to influence his colleagues at the Department for Education and Employment to reconsider their unsympathetic stance over this crucial issue.
I never want to see in Scotland an education system where credit rating counts more than grade averages, or where bank balances count more than qualifications, with pay-as-you-learn in a two-tier system based on ability to pay rather than on ability to learn.
That grates against the traditional Scottish education system, open to all who can benefit to the full extent of their abilities. The Minister and I both benefited from the grants system that his Government have now abolished. I guess that in opposition he would have agreed with me, but sadly in government he does not.
The Scottish education tradition and the Scottish democratic intellect are well suited to the needs of the 21st century if—and only if—we play to their strengths and build on those traditions, and do not destroy them by restricting access and placing barriers to entry.
This tuition fee unfairness is only one example of the general problem produced by the Government's policy. I hope that the Minister can convince his English colleagues to play their part in getting rid of such obvious discrimination against non-Scottish-domiciled UK students. It would not take much money for the Government to do that, and it would end that unfairness. I hope that he will so argue.

The Minister for Education and Industry, Scottish Office (Mr. Brian Wilson): There is a slightly surreal quality to this debate, on several counts. I listened as closely as I could to the hon. Member for Angus (Mr. Welsh), and he did not seem to use the figure that he has been touting all day in Scotland and at a press conference in London. He alleges that the changes to the student funding system will cost the Scottish economy £200 million a year. Even by the standards of Scottish National party economics, that is a fantasy figure par excellence.

Mr. Welsh: The Minister should stop this fatuous nonsense. I pointed out that the McNicholl report stated that £210 million was put into the Scottish economy directly and indirectly through spending by United Kingdom students in Scotland. That is the total sum they contribute. Any reduction would have an immediate effect on the Scottish economy and the four-year honours degree, and would reduce the range of courses available in Scotland.

Mr. Wilson: The hon. Gentleman has talked so much gibberish today that I do not suppose that he knows what he said. I quote from his press release:
The likely impact is fewer English, Welsh and Northern Irish students at Scottish universities, and the loss of over £200 million which these students contribute to the general Scottish economy.
I do not have to contradict the hon. Gentleman, as he has contradicted himself. He has been talking about the loss of £200 million to the Scottish economy on the radio all day. Unfortunately, sections of the media in Scotland give


credibility to the nonsense that he talks. The Scottish National party parliamentary group news release refers to the loss of over £200 million to the Scottish economy.

Mr. Welsh: rose—

Mr. Wilson: The hon. Gentleman can talk for the entire half-hour, if he wants. Perhaps he will acknowledge that the document is not a forgery. He has issued a press release which states that the Scottish economy will lose £200 million.

Mr. Welsh: rose—

Mr. Wilson: No, I will not give way. I shall respond to what the hon. Gentleman said.
We have heard from the hon. and learned Member for North-East Fife (Mr. Campbell) that the collapse of Scottish education is imminent because of the changes to funding that have been made.

Mr. Menzies Campbell: rose—

Mr. Wilson: I may give way in a moment.
Let me start with the latest application figures for St. Andrews—the university which has made the most noise about potential loss and about which the hon. and learned Member for North-East Fife has spoken in apocalyptic terms. I am delighted to inform the hon. and learned Gentleman that our latest understanding is that the application figures for St. Andrews show a 6 per cent. increase for the coming year from English- domiciled students. I suppose that that will allow the ever-opportunistic SNP to revert to its more familiar role of complaining about too many English students rather than too few.

Mr. Welsh: Absolute rubbish.

Mr. Wilson: Where does a 6 per cent. increase in English-domiciled students' applications to St. Andrews leave the absurdities that we have been hearing from the hon. Gentleman tonight?

Mr. Welsh: I should like the Minister to stick to the point. If the English Department for Education and Employment stood by its responsibilities, this anomaly of the discrimination against English and other students would be stopped. The Minister is simply indulging in party political banter. He should stop that nonsense and stick to the point of the debate, rather than misquoting other people.

Mr. Wilson: I have quoted exactly what others say—to wit, the hon. Gentleman himself. He has said that there will be a £200 million loss to the Scottish economy. In order to retain a shred of credibility, he now has to link that specific prediction to the fact that applications for the coming session from English students to St. Andrews are up by 6 per cent. If he can do that, it will be a worthy achievement indeed.
There is a slight decrease overall in the number—[Interruption.] The hon. Member for Moray (Mrs. Ewing) seems to be trying to help the hon. Gentleman out. She is his parliamentary leader after all, and if she wants to stand by the claim that there will be a £200 million loss to the Scottish economy, she is welcome to do so. Equally, if she wants to quibble with the 6 per cent. increase in English applications to St. Andrews, she is welcome to do so.

Mrs. Margaret Ewing: Will the Minister give us an idea of the decrease in the number of overall applications to Scottish universities?

Mr. Wilson: Were Ito do so, I would be going outside the terms of the debate as defined by the hon. Member for Angus. The hon. Gentleman wanted, in this rather unexpected burst of internationalism, to talk about the prospects for English students. I have just told the hon. Member for Moray—she apparently does not like the information—that the applications from English students to St. Andrews are up by 6 per cent. for next year.

Mr. Robert McCartney: There is talk about English students, but 25 per cent. of the total non-Scottish students at Scottish universities are from Northern Ireland, yet the ratio in population of Northern Ireland to the rest of the United Kingdom—England and Wales—must be very small. The reason for that is that there is a deficit on the Scottish ratio of 12,000 university places in Northern Ireland and on the Welsh ratio of 5,000. Those people go to Scottish universities because Scotland is proximate and the ambience suits them. Yet because of the absence of places, they will be punished by having to pay for a fourth year which is required by Scottish universities. Is that not discriminatory and unjust?

Mr. Wilson: It is good to hear a sensible point, about which there is a reasonable argument. But the responsibility for the funding of Northern Ireland students rests with the Northern Ireland Office. Equally, 40 per cent. of students from throughout the United Kingdom, certainly those in Scotland, will pay nothing at all in tuition fees. But it is a decision for the funding body, and in that case the funding body is the Northern Ireland Office, with which the hon. and learned Gentleman should take up the matter.
I must make progress in the time that remains. There is a slight decrease overall in the number of applications from outside Scotland. However, that is certainly less than the 6 per cent. increase in admissions that took place this session in advance of the changes in student support arrangements. So, overall, there is only a marginal change in the numbers wanting to study in Scotland, and, of course, applications are still coming in.
The SNP claims about the loss to the Scottish economy are self-evidently absurd, both in the light of the figures quoted and also on the basis of the hon. Gentleman's apparent equation of applications with admissions to Scottish universities, which will, as usual, be heavily over-subscribed this year.
If the hon. Gentleman is worried about there not being enough applications from England, I can tell him that there are already more than 20,000. There will be 30,000 new students in Scottish universities this year and there


are more applications to Scottish universities from English students than there are from Scottish students. I hope that that satisfies the hon. Gentleman's internationalism. If he thinks that it is a blissful state of affairs that 44 per cent. of St. Andrews' students and 48 per cent. of Edinburgh's students come from outwith Scotland but within the UK, that is his business. Perhaps he should start a campaign to get more English students into Paisley university, for instance, which has 1 per cent. of English students.
The hon. Gentleman seems to be ignorant of the fact that it is a long-established practice for students with appropriate A-levels to have the option of entering the second year of some Scottish degree courses. The recommendation that more should be encouraged to pursue that option has come not from the Government but from the Garrick report, "Future of Scottish Higher Education". Let me read paragraph 4.59 of the report to the hon. Gentleman, as I doubt whether he has read it.

Mr. Welsh: I have read it.

Mr. Wilson: The hon. Gentleman says that he has read it, so he knows that it is not a Government proposal. He spoke approvingly of the Garrick report, yet he asserts to the House that it is the Government who recommend that more students should enter the second year. If he has read the report, he must know that it is a Garrick report recommendation. I shall read paragraph 4.59, as I doubt whether the hon. Gentleman is aware of it. It says:
The A level curriculum is well-established and understood. Scottish higher education institutions should, therefore, act immediately to consider how advanced standing can be achieved in more cases.
In case that was not clear enough, recommendation 6 of the report says:
We recommend to higher education providers that they should clearly specify their requirements for combinations of A levels which will lead to entry with advanced standing within the new qualifications framework.
It is remarkable, if the hon. Gentleman has read that report, that he has only now concluded that a modest increase in the number of A-level entrants into the second year represents a threat to the very fabric of Scotland's universities. The question that I put to the hon. Gentleman, to give him due time to think about it, is whether the SNP holds the same view about Scottish school leavers who will hold advanced highers, because they too are likely to have advanced entry into higher education on Scottish university courses.
I do not know what the hon. Gentleman thinks, because we have had so many contradictory quotations from him. On 22 July 1997, in the Press and Journal, he said that Scottish students
as a whole receive 5 years of free schooling, compared with 6 years in the rest of the UK.
But they are now to be penalised by being forced to pay fees … for one more year than their English, Welsh and Northern Irish counterparts.
That was a statement of the obvious. The Garrick report said that we should do something about it, and we did, so it will not happen. The anomaly has been resolved.
However, on 4 November 1997, the hon. Gentleman said:
The weakness of the Government's proposals is best highlighted by one anomaly. Scottish domiciled students studying in Scotland will pay for only three years of their four year degree course, while English, Welsh and Northern Ireland students will be forced to pay for the full four years.
As a graduate of a Scottish university, the hon. Gentleman is capable of simple arithmetic. On 22 July, he thought that it was wrong that Scottish students who did five years at school and four years at university should be asked to pay more than English students, and we addressed that anomaly. Five and four make nine, but six and four make 10. He then asked that the same rule should apply to students who do 10 years. What is the hon. Gentleman's position? Does he think that there should be parity on the basis of nine years, or that nine in Scotland is the same as 10 in England?

Mr. Welsh: The Minister is betraying why he is so out of touch with educational opinion in Scotland, and why students are up in arms at the Government's policy. I am sure that he would not have supported such a proposal in opposition. The SNP's position is straightforward: we oppose the principle of tuition fees. However, if the Government want to introduce them, they should do so fairly rather than in a discriminatory way. The Government's policy is at fault.

Mr. Wilson: The hon. Gentleman may have some feelings in this matter, but in making contradictory statements, he has made a fool of himself and his party. Everything that he has said today contradicts everything that he said previously. I know his position—I looked up the early-day motion that he tabled, in which he asserts the basic right to Government-funded further and higher education for all. That is a general principle, but it takes us back not only to the position before 1992 but to the position before 1979.
I heard the hon. Gentleman on the radio this morning say that he wants the abolition of tuition fees and maintenance loans. When he and I went to university, one in 14 Scottish school leavers had that privilege, whereas now almost one in two have it. He wants exactly the same funding arrangements now as there were in the 1960s.
For the first time in Scottish political history, the SNP will be answerable for some of its mad financial calculations. We shall cost the proposal as enunciated by the hon. Gentleman in his early-day motion. If there are to be no fees or loans, that is a blissful state of affairs, but it will cost a vast sum of money. I challenge the hon. Gentleman to say whether that is the SNP's spending commitment—yes or no. He has been very free in intervening, so will he answer that question?

The motion having been made after Ten o'clock, and the debate having continued for half an hour, MR. DEPUTY SPEAKER adjourned the House without Question put, pursuant to the Standing Order.

Adjourned at half-past Ten o'clock.